Lonza Group (LZAGY)
OTHER OTC:LZAGY
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Lonza Group
(OTC:LZAGY)
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Rating:61Neutral
Price Target:
$63.00
▼(-5.56% Downside)
Action:Reiterated
Date:01/31/26
The score is driven by solid profitability and a notably upbeat earnings outlook (strong 2026 growth and margin guidance), partly offset by weak cash conversion/negative free cash flow in the financial statements and a demanding valuation; technical indicators are mixed and do not add strong support.
Positive Factors
Upgraded 2026 Guidance
Management's explicit guidance for double-digit constant-currency revenue growth and entry into a >32% CORE EBITDA corridor demonstrates durable operational leverage and disciplined margin expansion. This implies sustainable profit improvement from higher contract volumes and efficiency gains over the medium term.
Negative Factors
Weak Cash Conversion
Persistently negative free cash flow and low operating cash conversion versus reported earnings constrain financial flexibility. Over the medium term this limits capacity to pay down debt, fund buybacks or increase returns without continued high capex or asset sales, raising funding risk.
Read all positive and negative factors
Positive Factors
Negative Factors
Upgraded 2026 Guidance
Management's explicit guidance for double-digit constant-currency revenue growth and entry into a >32% CORE EBITDA corridor demonstrates durable operational leverage and disciplined margin expansion. This implies sustainable profit improvement from higher contract volumes and efficiency gains over the medium term.
Read all positive factors
Lonza Group (LZAGY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$41.52B
Dividend Yield0.63%
Average Volume (3M)5.62K
Price to Earnings (P/E)―
Beta (1Y)0.70
Revenue Growth4.99%
EPS Growth-152.72%
CountryUS
Employees17,995
SectorHealthcare
Sector Strength45
IndustryMedical - Diagnostics & Research
Share Statistics
EPS (TTM)-0.38
Shares Outstanding702,290,200
10 Day Avg. Volume0
30 Day Avg. Volume5,617
Financial Highlights & Ratios
PEG Ratio0.74
Price to Book (P/B)4.09
Price to Sales (P/S)5.71
P/FCF Ratio-191.57
Enterprise Value/Market Cap0.91
Enterprise Value/Revenue5.81
Enterprise Value/Gross Profit16.42
Enterprise Value/Ebitda19.88
Forecast
1Y Price Target
$80.00Price Target Upside19.92% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)2.28
Revenue Forecast (FY)$9.09B
Lonza Group Business Overview & Revenue Model
Company Description
Lonza Group AG, along with its various affiliates, provides a comprehensive array of offerings for the pharmaceutical, biotechnology, and nutrition industries. Its global operations extend across Europe, North and Central America, Latin America, A...
How the Company Makes Money
Lonza primarily makes money by providing outsourced development and manufacturing services (CDMO) to biopharma and biotech customers under contract arrangements. Key revenue streams include: (1) Development services: fees for process and analytica...
Lonza Group Earnings Call Summary
Earnings Call Date:Jan 28, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 22, 2026
Earnings Call Sentiment Positive
The call communicated a strong operational and financial performance for FY2025 with robust revenue growth (+21.7% ccy), margin expansion (CORE EBITDA 31.6%, +1.4pp) and material free cash flow improvement. Management provided clear evidence of successful Vacaville integration, high contracting activity, and an optimistic 2026 outlook (11%–12% ccy growth and margin above 32%). Key challenges include softness in Specialized Modalities (notably Cell & Gene operational issues), mix-related dilution in Integrated Biologics, FX headwinds and continued high but normalizing CapEx and working capital requirements. On balance, the positive metrics, guidance upgrade to earlier-than-expected margin corridor, strong cash generation and successful integration evidence significantly outweigh the operational and market risks noted.Positive Updates
Strong Revenue Growth
Continuing Lonza CDMO sales of CHF 6.5 billion in FY2025, up CHF 1.0 billion versus FY2024 and +21.7% in constant currency, ahead of upgraded guidance of 20%–21%.
Negative Updates
Specialized Modalities Softness
Specialized Modalities (including Cell & Gene and microbial) underperformed in 2025 with platform revenue down ~3%; Cell & Gene experienced operational issues that constrained performance during the year.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Revenue Growth
Continuing Lonza CDMO sales of CHF 6.5 billion in FY2025, up CHF 1.0 billion versus FY2024 and +21.7% in constant currency, ahead of upgraded guidance of 20%–21%.
Read all positive updates
Company Guidance
Management guided 2026 for continued strong, profitable growth: constant‑currency sales growth of 11–12% and CORE EBITDA margin expanding to a level well above 32% (entering the 32–34% corridor two years ahead of prior expectations). They expect 2026 CapEx to be in the high‑teens % of sales (mid‑ to high‑teens over the midterm) after 2025 CDMO CapEx of CHF 1.3bn (19.6% of sales) and CHF 7bn of active growth projects across 23 programs; free cash flow momentum should continue after CHF 545m of CDMO FCF in 2025 (nearly double 2024). Other metrics/assumptions: Vacaville contributed ~CHF 0.6bn in 2025 and should broadly substitute Roche volumes through 2028, contracting exceeded CHF 10bn in 2025, trade working capital fell ~5 percentage points and inventory cover dropped ~1 week, and management assumes an FX headwind of roughly 2% for the 2026 guide (mid‑January rates basis).Lonza Group Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
67
Positive
Cash Flow
38
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 6.53B | 6.57B | 6.72B | 6.22B | 5.41B |
| Gross Profit | 2.31B | 2.16B | 1.95B | 2.44B | 2.11B |
| EBITDA | 1.31B | 1.54B | 1.53B | 1.98B | 1.31B |
| Net Income | 949.00M | 636.00M | 654.00M | 1.22B | 2.94B |
Balance Sheet | |||||
| Total Assets | 18.97B | 19.73B | 16.85B | 17.36B | 16.46B |
| Cash, Cash Equivalents and Short-Term Investments | 719.00M | 1.71B | 1.67B | 2.22B | 3.18B |
| Total Debt | 4.54B | 5.12B | 3.13B | 2.59B | 2.75B |
| Total Liabilities | 9.78B | 10.35B | 7.34B | 6.69B | 6.64B |
| Stockholders Equity | 9.13B | 9.33B | 9.45B | 10.60B | 9.75B |
Cash Flow | |||||
| Free Cash Flow | -194.83M | -143.00M | -263.00M | -833.00M | -126.00M |
| Operating Cash Flow | 1.12B | 1.27B | 1.39B | 1.04B | 1.22B |
| Investing Cash Flow | -699.09M | -2.92B | -1.10B | -991.00M | 1.02B |
| Financing Cash Flow | -721.06M | 1.28B | -152.00M | -286.00M | -1.28B |
Lonza Group Technical Analysis
Negative
66.71
Price Trends
62.71
Negative
63.82
Negative
65.86
Negative
Market Momentum
-0.14
Positive
44.46
Neutral
53.60
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LZAGY, the sentiment is Negative. The current price of 66.71 is above the 20-day moving average (MA) of 62.40, above the 50-day MA of 62.71, and above the 200-day MA of 65.86, indicating a bearish trend. The MACD of -0.14 indicates Positive momentum. The RSI at 44.46 is Neutral, neither overbought nor oversold. The STOCH value of 53.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LZAGY.
Lonza Group Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $35.89B | 25.43 | 20.84% | 0.72% | 9.11% | 22.77% | |
69 Neutral | $125.40B | 34.00 | 7.06% | 0.53% | 4.02% | 0.05% | |
68 Neutral | $28.00B | 20.40 | 22.46% | ― | 7.33% | 9.79% | |
67 Neutral | $172.66B | 25.20 | 13.26% | 0.30% | 5.36% | 6.54% | |
64 Neutral | $23.13B | 26.54 | -610.32% | ― | 6.78% | 6.19% | |
61 Neutral | $41.52B | -125.46 | -3.10% | 0.63% | 4.99% | -152.72% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
LZAGY
Lonza Group
61.28
-6.79
-9.97%
A
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TMO
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464.61
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17.20%
IQV
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13.04
8.43%
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.