Roche Holding AG (ROG) AI Stock Analysis

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Roche Holding AG

(OTC:ROG)

Rating:75Outperform

Price Target:

CHF298.00

▲(11.11%Upside)

Roche's strong cash flow generation and positive earnings call guidance are significant strengths, offsetting some concerns about profitability and valuation. The technical indicators suggest a cautious approach, but the company's robust dividend yield and strategic growth initiatives support a favorable overall stock score.

Positive Factors

Investment

Roche announced a $50 billion investment in the US for Pharma and diagnostics, including research and development sites and new manufacturing facilities.

Market Share

Roche continues to take market share in the US across various indications with increasing percentages.

Pipeline Development

Another high profile phase 2 asset is now moving into phase 3.

Negative Factors

Currency Impact

CHF strength vs the USD hasn't been helpful.

Financial Outlook

The mid-term earnings growth outlook for Roche is projected at 4%, which is lower compared to sector peers at 8%.

Sales Performance

Vabysmo missed consensus by 8% due to lower reimbursement by US charities.

Roche Holding AG (ROG) vs. iShares MSCI Switzerland ETF (EWL)

Market Cap

CHF216.63B

Dividend Yield3.39%

Average Volume (3M)996.96K

Price to Earnings (P/E)25.8

Beta (1Y)1.15

Revenue Growth3.03%

EPS Growth-27.86%

CountryCH

Employees103,249

SectorHealthcare

Sector Strength41

IndustryDrug Manufacturers - General

Share Statistics

EPS (TTM)8.57

Shares Outstanding702,562,700

10 Day Avg. Volume796,949

30 Day Avg. Volume996,964

Financial Highlights & Ratios

PEG Ratio-2.92

Price to Book (P/B)7.46

Price to Sales (P/S)0.00

P/FCF Ratio20.95

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

CHF286.93

Price Target Upside6.98% Upside

Rating ConsensusHold

Number of Analyst Covering12

Roche Holding AG Business Overview & Revenue Model

Company DescriptionRoche Holding AG is a global healthcare company headquartered in Basel, Switzerland, operating primarily in the pharmaceuticals and diagnostics sectors. It is renowned for its focus on advancing science to improve people's lives, offering a wide range of products, including innovative medicines and diagnostic tests. Roche is a leader in personalized healthcare, aiming to provide targeted treatments tailored to patients' specific needs.

How the Company Makes MoneyRoche Holding AG generates revenue through the development, manufacturing, and sale of pharmaceutical products and diagnostic solutions. The company operates two primary divisions: Pharmaceuticals and Diagnostics. The Pharmaceuticals division is the main revenue driver, offering prescription medicines in areas such as oncology, immunology, infectious diseases, ophthalmology, and neuroscience. Roche's Diagnostics division provides a broad array of testing solutions, including in vitro diagnostics, molecular diagnostics, and tissue-based cancer diagnostics. Furthermore, Roche benefits from strategic partnerships and collaborations, enhancing its research and development capabilities and expanding its market reach. The company also invests heavily in research and development to innovate and maintain a competitive edge in the healthcare industry.

Roche Holding AG Earnings Call Summary

Earnings Call Date:Jan 30, 2025

(Q4-2024)

% Change Since: -1.33%|

Next Earnings Date:Jul 24, 2025

Earnings Call Sentiment Positive

Roche demonstrated strong financial performance in 2024 with significant growth in sales, operating profit, and cash flow. The pharmaceutical and diagnostics divisions both showed robust growth, supported by strategic acquisitions and new product launches. However, challenges such as the decline in COVID-19 sales, impairments affecting net income, and market challenges in China were notable concerns. Overall, the highlights substantially outweigh the lowlights.

Q4-2024 Updates

Positive Updates

Strong Financial Performance

Group sales grew 7%, with the base business growing 9%, pharma 9%, and diagnostics 8%. Core operating profit increased by 14%, with a core operating margin up 2.1 percentage points. Operating free cash flow increased by 34% to CHF21.2 billion.

Pharmaceutical Achievements

Pharma sales grew 8% to CHF46.2 billion, driven by Vabysmo, Phesgo, and Ocrevus, among others. The company launched two new medicines, PiaSky and Itovebi, in 2024.

Diagnostics Growth

Diagnostics division reported 4% sales growth, with a strong base business growth of 8% driven by immunodiagnostics and clinical chemistry.

Pipeline and Product Launches

Roche achieved several key milestones, including EU approval for Vabysmo pre-filled syringe and positive readouts for trontinemab and NXT007. Launches included Mass Spectrometry system and cobas 6800/8800 version 2.

Strategic Acquisitions and Partnerships

Acquisition of Poseida to expand the allogeneic CAR-T portfolio, introducing potential treatments for oncology and autoimmune diseases.

Negative Updates

COVID-19 Sales Decline

Final impact of COVID-19 sales reduction in 2024 amounted to CHF1.1 billion, aligning with guidance but marking the end of a significant revenue stream.

Challenges in China

Diagnostics sales in China were impacted by volume-based procurement and reimbursement reductions, leading to a lower growth projection for 2025.

Impairments Affecting Net Income

IFRS net income decreased by 19% due to two major impairments totaling CHF3.9 billion, reflecting unmet expectations of acquired assets.

Patent and Biosimilar Concerns

Continued concern over patent expirations and biosimilar competition, notably impacting Actemra and Ocrevus in the future.

Company Guidance

During the call, Roche Group provided detailed guidance on its fiscal 2024 performance, highlighting several key metrics. The company achieved an overall group sales growth of 7%, with the base business excluding COVID-19 impacts growing by an impressive 9%. The pharmaceutical division reported a 9% increase, and the diagnostics division saw an 8% rise. Roche confirmed that the final impact of COVID-19 sales reduction was CHF1.1 billion, aligning with their initial guidance. The loss of exclusivity (LOE) impact was CHF1 billion, slightly better than expected. The core operating profit grew by 14%, and the group core operating margin increased by 2.1 percentage points. Additionally, core EPS growth was 12%, excluding tax effects, or 7% when including them. Operating free cash flow surged by 34% to CHF21.2 billion, reflecting strong financial health. Looking forward, Roche anticipates mid-single digit group sales growth and high-single digit core EPS growth for 2025, despite an expected LOE impact of CHF1.2 billion. The company also plans to continue its tradition of increasing dividends, marking the 38th consecutive year of growth in this area.

Roche Holding AG Financial Statement Overview

Summary

Income Statement

Balance Sheet

Cash Flow

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
59.69B	62.40B	60.44B	63.28B	62.80B	58.32B
	Gross Profit
43.94B	46.11B	44.08B	44.44B	43.10B	41.97B
	EBIT
17.74B	13.42B	15.39B	18.18B	17.28B	17.73B
	EBITDA
17.60B	16.62B	18.41B	20.80B	22.19B	22.97B
	Net Income Common Stockholders
10.62B	8.28B	11.50B	12.42B	13.93B	14.29B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
10.90B	17.32B	10.51B	9.77B	13.03B	12.33B
	Total Assets
61.02B	101.80B	90.47B	88.15B	92.32B	86.14B
	Total Debt
30.06B	36.35B	30.78B	26.54B	32.55B	15.41B
	Net Debt
28.22B	29.38B	25.41B	21.55B	25.70B	9.68B
	Total Liabilities
49.36B	65.64B	57.20B	56.14B	63.97B	46.37B
	Stockholders Equity
9.47B	31.77B	29.32B	27.99B	24.49B	36.34B
Cash Flow		Free Cash Flow
11.42B	15.09B	11.45B	13.34B	16.02B	11.47B
	Operating Cash Flow
15.82B	20.09B	16.09B	17.89B	20.57B	18.16B
	Investing Cash Flow
-13.14B	-11.39B	-10.64B	-3.57B	-6.55B	-9.08B
	Financing Cash Flow
-993.00M	-6.82B	-4.24B	-15.72B	-12.70B	-9.24B

Roche Holding AG Technical Analysis

Technical Analysis Sentiment

Positive

Last Price268.20

Price Trends

50DMA

264.87

Positive

100DMA

273.72

Negative

200DMA

265.02

Positive

Market Momentum

MACD

0.53

Negative

RSI

56.82

Neutral

STOCH

87.00

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:ROG, the sentiment is Positive. The current price of 268.2 is above the 20-day moving average (MA) of 261.77, above the 50-day MA of 264.87, and above the 200-day MA of 265.02, indicating a bullish trend. The MACD of 0.53 indicates Negative momentum. The RSI at 56.82 is Neutral, neither overbought nor oversold. The STOCH value of 87.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CH:ROG.

Roche Holding AG Peers Comparison

Overall Rating

UnderperformOutperform

Sector (54)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NOVN	81 Outperform	CHF185.70B	17.09		3.62%	6.34%	-13.16%
STMN	78 Outperform	CHF17.02B	44.02		0.88%	3.82%	57.08%
ROG	75 Outperform	CHF216.63B	25.83	26.76%	3.39%	3.03%	-27.86%
ALC	73 Outperform	$36.49B	36.37	5.23%	0.36%	3.90%	6.76%
LONN	64 Neutral	CHF40.32B	64.17		0.69%	-2.13%	2.50%
Sector *	54 Neutral	$5.37B	3.35	-45.10%	2.79%	16.77%	-0.01%

* Healthcare Sector Average

Performance Comparison

CH:ROG

Roche Holding AG

269.80

34.10

14.47%

CH:NOVN

Novartis AG

97.57

6.18

6.76%

CH:LONN

Lonza Group Ltd

576.60

94.87

19.69%

CH:STMN

Straumann Holding AG

110.25

-3.31

-2.91%

CH:ALC

Alcon

73.02

-8.79

-10.75%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.