SGS SA (CH:SGSN)
:SGSN
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SGS SA
(SGSN)
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Rating:67Neutral
Price Target:
CHF91.00
▼(-3.64% Downside)
Action:ReiteratedDate:02/18/26
The score is driven by strong earnings/cash-flow momentum and a positive 2026 outlook from the latest call, supported by a constructive (but not overextended) technical trend. These positives are tempered most by elevated balance-sheet leverage and a valuation that looks relatively rich at ~27x earnings despite a ~3.4% dividend yield.
Positive Factors
Strong cash generation
Consistently strong operating cash flow and high free cash flow provide durable internal funding for dividends, capex, and disciplined M&A. Reliable cash conversion reduces dependence on external financing and supports multi-year investment in digital, sustainability and bolt-on acquisitions.
Negative Factors
High leverage and thin equity
Material debt levels and relatively thin equity limit financial flexibility and increase refinancing and covenant risk. Elevated leverage constrains the balance sheet's ability to absorb shocks, reduces optionality for opportunistic investments and makes cash generation more critical for deleveraging.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Consistently strong operating cash flow and high free cash flow provide durable internal funding for dividends, capex, and disciplined M&A. Reliable cash conversion reduces dependence on external financing and supports multi-year investment in digital, sustainability and bolt-on acquisitions.
Read all positive factors
SGS SA (SGSN) vs. iShares MSCI Switzerland ETF (EWL)
Market Cap
CHF16.33B
Dividend Yield3.53%
Average Volume (3M)343.65K
Price to Earnings (P/E)26.1
Beta (1Y)0.79
Revenue Growth3.12%
EPS Growth11.70%
CountryCH
Employees95,244
SectorIndustrials
Sector Strength72
IndustryConsulting Services
Share Statistics
EPS (TTM)2.00
Shares Outstanding194,777,280
10 Day Avg. Volume319,408
30 Day Avg. Volume343,653
Financial Highlights & Ratios
PEG Ratio2.07
Price to Book (P/B)19.36
Price to Sales (P/S)2.51
P/FCF Ratio18.02
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
CHF95.17Price Target Upside0.77% Upside
Rating ConsensusHold
Number of Analyst Covering6
EPS Forecast (FY)4.11
Revenue Forecast (FY)CHF7.50B
SGS SA Business Overview & Revenue Model
Company Description
SGS SA provides inspection, verification, testing, certification, and quality assurance services in Europe, Africa, the Middle East, the Americas, and the Asia Pacific. It operates in five segments: Connectivity & Products, Health & Nutrition, Ind...
How the Company Makes Money
SGS makes money primarily by charging fees for professional services delivered through its laboratory network and field operations. Key revenue streams include: (1) Testing services—laboratory analysis of materials and products (e.g., chemical, ph...
SGS SA Earnings Call Summary
Earnings Call Date:Feb 11, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 29, 2026
Earnings Call Sentiment Positive
The call presents a predominantly positive performance: record sales, record adjusted operating income and free cash flow, strong organic growth across multiple divisions and regions, successful execution of efficiency programs and a clear strategic M&A push (notably ATS and ~CHF 190m of bolt-on sales). Key risks highlighted were a significant foreign-exchange headwind, regional/sector variability (notably in Natural Resources and consulting), ongoing restructuring and nonrecurring items, and a temporary post-acquisition leverage uptick. Management emphasizes disciplined M&A, continued reinvestment into digital and sustainability capabilities, and a conservative approach to margins (maintaining a 16% AOI floor while reserving flexibility to invest surplus). Overall, positive operational momentum is balanced against macro (FX, geopolitical) and timing uncertainties, but the highlights materially outweigh the lowlights.Positive Updates
Record Sales
Sales reached a record CHF 6.95 billion in FY2025, driven by 5.6% organic growth and 1.7% from M&A; reported growth was 2.2% (adversely impacted by ForEx).
Negative Updates
Significant ForEx Headwind
Adverse foreign exchange reduced reported sales growth by 5.1% and subtracted the equivalent of 6.4% from adjusted operating income (c.20 basis points on AOI margin); management flagged a potential c.8% FX impact in Q1 2026 if current rates persist.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Sales
Sales reached a record CHF 6.95 billion in FY2025, driven by 5.6% organic growth and 1.7% from M&A; reported growth was 2.2% (adversely impacted by ForEx).
Read all positive updates
Company Guidance
For 2026 management guided organic growth of 5–7%, expects more than +5% additional sales from acquisitions (including ATS, closed Jan‑2026), and will maintain a minimum 16% adjusted operating income margin in reported terms while retaining flexibility to reinvest surplus into innovation; this follows record 2025 metrics: sales CHF 6.95bn, adjusted operating income CHF 1.1bn (16%, +70bps vs 2024), free cash flow CHF 774m (57% cash conversion) or CHF 841m including CHF 67m HQ disposal proceeds, EPS CHF 3.48 (+12.3%) or CHF 3.21 (+3.5%) excluding the HQ gain, reported sales growth +2.2% (7.3% constant currency = 5.6% organic +1.7% M&A). Operational efficiencies reached CHF 115m P&L impact since 2024 with a CHF 150m run‑rate at end‑2025 and ~CHF 35m still to flow through in 2026; net debt/EBITDA was 1.7x (temporarily ~2.1–2.2x post‑ATS), ROIC 24%, proposed scrip dividend CHF 3.20/share, and management warned FX remains a headwind (‑5.1% sales impact in 2025, ~‑20bps on AOI and an ~‑8% FX effect seen in Q1‑2026 at current rates).SGS SA Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
38
Negative
Cash Flow
72
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 6.95B | 6.79B | 6.62B | 6.64B | 6.41B |
| Gross Profit | 5.97B | 5.83B | 2.36B | 2.41B | 2.34B |
| EBITDA | 1.50B | 1.40B | 1.36B | 1.40B | 1.48B |
| Net Income | 668.00M | 581.00M | 553.00M | 588.00M | 613.00M |
Balance Sheet | |||||
| Total Assets | 7.88B | 6.75B | 6.76B | 7.12B | 7.01B |
| Cash, Cash Equivalents and Short-Term Investments | 2.33B | 1.21B | 1.57B | 1.62B | 1.48B |
| Total Debt | 5.30B | 3.88B | 4.41B | 4.45B | 3.81B |
| Total Liabilities | 6.89B | 5.87B | 6.23B | 6.36B | 5.80B |
| Stockholders Equity | 901.00M | 797.00M | 459.00M | 682.00M | 1.12B |
Cash Flow | |||||
| Free Cash Flow | 968.00M | 973.00M | 825.00M | 653.00M | 782.00M |
| Operating Cash Flow | 1.22B | 1.22B | 1.12B | 985.00M | 1.12B |
| Investing Cash Flow | -310.00M | -393.00M | -300.00M | -397.00M | -549.00M |
| Financing Cash Flow | 289.00M | -1.19B | -839.00M | -375.00M | -826.00M |
SGS SA Technical Analysis
Negative
94.44
Price Trends
91.86
Negative
91.56
Negative
87.70
Negative
Market Momentum
-2.48
Positive
28.78
Positive
29.15
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:SGSN, the sentiment is Negative. The current price of 94.44 is above the 20-day moving average (MA) of 88.28, above the 50-day MA of 91.86, and above the 200-day MA of 87.70, indicating a bearish trend. The MACD of -2.48 indicates Positive momentum. The RSI at 28.78 is Positive, neither overbought nor oversold. The STOCH value of 29.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CH:SGSN.
SGS SA Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | CHF16.33B | 26.12 | ― | 3.53% | 3.12% | 11.70% | |
67 Neutral | CHF3.76B | 18.40 | ― | 4.14% | 2.66% | 2.91% | |
65 Neutral | CHF6.43B | 33.91 | 4.37% | 2.13% | 4.23% | -4.24% | |
64 Neutral | CHF5.93B | 25.28 | 22.69% | 1.82% | 8.15% | 12.24% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | CHF21.41B | 23.05 | ― | 4.81% | 6.54% | -10.57% | |
60 Neutral | CHF3.18B | 11.86 | ― | 4.46% | -4.68% | -5.79% |
* Industrials Sector Average
CH:SGSN
SGS SA
84.10
-1.38
-1.61%
CH:AVOL
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47.26
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CH:KNIN
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180.30
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-6.87%
CH:ADEN
Adecco Group AG
18.99
-6.26
-24.79%
CH:DKSH
DKSH Holding AG
57.90
-7.15
-10.99%
CH:VZN
VZ Holding AG
150.80
-13.30
-8.11%
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.