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Roche Holding (CH:ROG)
:ROG
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Roche Holding AG
(OTC:ROG)
Rating:74Outperform
Price Target:
CHF294.00
â–²(13.08%Upside)
Positive Factors
Investment
Roche announced a $50 billion investment in the US for Pharma and diagnostics over the next five years, 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.
Product Development
Another high profile phase 2 asset is now moving into phase 3.
Negative Factors
Competitive Pressure
Long-term obesity optionality could be somewhat overshadowed by increasing amylin competition.
Financial Performance
The mid-term earnings growth outlook for Roche is projected at 4%, which is lower compared to sector peers at 8%.
Sales Performance
A more challenging US market for Vabysmo drives FY25 sales growth closer to 18% YoY, compared to the pre-Q1 consensus of around 33% growth.
Roche Holding AG (ROG) vs. iShares MSCI Switzerland ETF (EWL)
Market Cap
CHF209.85B
Dividend Yield3.73%
Average Volume (3M)936.87K
Price to Earnings (P/E)25.0
Beta (1Y)1.15
Revenue Growth3.03%
EPS Growth-27.86%
CountryCH
Employees103,249
SectorHealthcare
Sector Strength39
IndustryDrug Manufacturers - General
Share Statistics
EPS (TTM)8.57
Shares Outstanding702,562,700
10 Day Avg. Volume846,214
30 Day Avg. Volume936,873
Financial Highlights & Ratios
PEG Ratio-3.57
Price to Book (P/B)8.30
Price to Sales (P/S)0.00
P/FCF Ratio17.42
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
CHF281.09Price Target Upside8.11% Upside
Rating ConsensusHold
Number of Analyst Covering13
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: -4.34%|
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
Roche Holding AG demonstrates solid financial health with strong cash flow generation and stable income statement metrics. However, the declining net profit margin and return on equity indicate potential pressures on profitability and efficiency. The balance sheet remains robust, with moderate leverage and improved equity financing. Overall, while the company faces some profitability challenges, its strong cash flow positions it well for future stability.Income Statement
Roche Holding AG's income statement shows a stable gross profit margin of approximately 74% for 2024. However, the net profit margin decreased from 19% in 2023 to 13% in 2024, indicating a reduction in profitability. Revenue growth was modest at 3.2% in 2024 compared to 2023, and EBIT margin also declined to 21.5% from 25.5% in 2023. EBITDA margin remains strong at 26.6% but has decreased from previous years. Overall, the company maintains strong profitability metrics, although there are signs of margin pressure.75
Positive
Balance Sheet
The balance sheet reflects a debt-to-equity ratio of 1.14 in 2024, indicating moderate leverage. Return on equity stands at 26%, which is a decline from 39% in 2023, suggesting reduced efficiency in using equity to generate profits. Equity ratio improved to 31.2% from 32.4% in 2023, indicating a slight improvement in asset financing through equity. While the company remains financially stable, the decline in ROE is a concern.70
Positive
Cash Flow
Roche's cash flow statement shows strong free cash flow generation with a growth rate of 31.8% in 2024. Operating cash flow to net income ratio is robust at 2.43, reflecting strong cash earnings relative to net income. Free cash flow to net income ratio also improved to 1.82, indicating efficient cash utilization. These metrics suggest excellent cash flow management despite the decline in net income.80
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 62.40B | 60.44B | 63.28B | 62.80B | 58.32B |
| Gross Profit | 46.11B | 44.08B | 44.44B | 43.10B | 41.97B |
| EBITDA | 16.62B | 18.41B | 20.80B | 22.19B | 22.97B |
| Net Income | 8.28B | 11.50B | 12.42B | 13.93B | 14.29B |
Balance Sheet | |||||
| Total Assets | 101.80B | 90.47B | 88.15B | 92.32B | 86.14B |
| Cash, Cash Equivalents and Short-Term Investments | 17.32B | 10.51B | 9.77B | 13.03B | 12.33B |
| Total Debt | 36.35B | 30.78B | 26.54B | 32.55B | 15.41B |
| Total Liabilities | 65.64B | 57.20B | 56.14B | 63.97B | 46.37B |
| Stockholders Equity | 31.77B | 29.32B | 27.99B | 24.49B | 36.34B |
Cash Flow | |||||
| Free Cash Flow | 15.09B | 11.45B | 13.34B | 16.02B | 11.47B |
| Operating Cash Flow | 20.09B | 16.09B | 17.89B | 20.57B | 18.16B |
| Investing Cash Flow | -11.39B | -10.64B | -3.57B | -6.55B | -9.08B |
| Financing Cash Flow | -6.82B | -4.24B | -15.72B | -12.70B | -9.24B |
Roche Holding AG Technical Analysis
Negative
260.00
Price Trends
263.01
Negative
272.53
Negative
264.61
Negative
Market Momentum
-1.34
Positive
46.38
Neutral
37.27
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:ROG, the sentiment is Negative. The current price of 260 is below the 20-day moving average (MA) of 262.78, below the 50-day MA of 263.01, and below the 200-day MA of 264.61, indicating a bearish trend. The MACD of -1.34 indicates Positive momentum. The RSI at 46.38 is Neutral, neither overbought nor oversold. The STOCH value of 37.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CH:ROG.
Roche Holding AG Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | CHF186.74B | 17.19 | 3.57% | 6.34% | -13.16% | ||
77 Outperform | CHF16.78B | 43.40 | 0.90% | 3.82% | 57.08% | ||
74 Outperform | CHF209.85B | 25.04 | 26.76% | 3.73% | 3.03% | -27.86% | |
73 Outperform | CHF34.91B | 34.79 | 5.23% | 0.32% | 3.90% | 6.76% | |
67 Neutral | CHF38.28B | 62.69 | 0.71% | -2.13% | 2.50% | ||
63 Neutral | CHF22.60B | 15.13 | 10.81% | 2.13% | 47.85% | -11.82% |
* Healthcare Sector Average
Performance Comparison
CH:ROG
Roche Holding AG
260.00
24.10
10.22%
CH:NOVN
Novartis AG
98.12
4.26
4.54%
CH:LONN
Lonza Group Ltd
560.20
61.09
12.24%
CH:STMN
Straumann Holding AG
105.25
-11.57
-9.90%
CH:ALC
Alcon
69.86
-10.46
-13.02%
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.