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Sandoz Group Ltd Sponsored ADR (SDZNY)
OTHER OTC:SDZNY
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Sandoz Group Ltd Sponsored ADR
(OTC:SDZNY)
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Rating:68Neutral
Price Target:
$82.00
▲(8.18% Upside)
Sandoz's overall stock score is driven by strong technical momentum and positive earnings call insights, despite financial performance challenges and high valuation concerns. The company's strategic focus on biosimilars and manufacturing expansion supports future growth prospects.
Positive Factors
Biosimilars contribution and pipeline
Biosimilars now account for a material portion of sales (30% in Q2) and a deep 27-asset pipeline targeting large originator markets. This positions Sandoz to capture structural cost-containment demand and sustainable revenue upside as biologic patents expire globally.
Manufacturing expansion and strategic acquisition
Targeted capacity expansion plus the Just-Evotec acquisition strengthen end-to-end biologics capability. Owning development and manufacturing assets reduces reliance on third parties, improves time-to-market for biosimilars, and supports durable competitive advantages in complex biologics supply.
Improved cash generation and financial flexibility
A marked improvement in free cash flow (more than doubled to >$500m) boosts reinvestment capacity and de-risks execution on the pipeline and capacity projects. Strong cash generation supports funding acquisitions and margin-enhancing investments without undue external funding.
Negative Factors
Zero net income in 2024
Reporting zero net income for 2024 signals that operational gains have not translated into bottom-line profitability. Persistently low net income undermines return metrics and limits retained earnings available for R&D, capex, and balance sheet strengthening over the medium term.
Price erosion pressuring margins
Renewed price erosion (≈3 percentage points) and a hit to gross margins are structural risks in generics. Persistent downward pricing pressure can compress long-term margins, forcing reliance on volume, higher-margin biosimilars, or cost cuts to maintain sustainable profitability.
Separation costs and near-term one-off cash strain
Large separation and rationalization costs (~$176m H1; ~$500m expected) are a durable headwind to free cash flow and earnings in the near-to-mid term. These structural transition expenses can delay reinvestment, strain margins, and elevate execution risk during separation.
Sandoz Group Ltd Sponsored ADR (SDZNY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$33.36B
Dividend Yield0.98%
Average Volume (3M)1.03K
Price to Earnings (P/E)142.3
Beta (1Y)0.40
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees22,049
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)0.88
Shares Outstanding440,000,000
10 Day Avg. Volume0
30 Day Avg. Volume1,031
Financial Highlights & Ratios
PEG Ratio-174.11
Price to Book (P/B)2.13
Price to Sales (P/S)1.68
P/FCF Ratio290.18
Enterprise Value/Market Cap0.84
Enterprise Value/Revenue3.12
Enterprise Value/Gross Profit6.65
Enterprise Value/Ebitda33.68
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Sandoz Group Ltd Sponsored ADR Business Overview & Revenue Model
Company DescriptionSandoz Group AG develops, manufactures, and markets generic pharmaceuticals and biosimilars worldwide. It develops, manufactures, and markets finished dosage forms of small molecule pharmaceuticals to third parties. It also provides protein- or other biotechnology-based products, including biosimilars; and biotechnology manufacturing services; and anti-infectives, such as active pharmaceutical ingredients and intermediates primarily antibiotics. The company was founded in 1886 and is headquartered in Rotkreuz, Switzerland.
How the Company Makes MoneySandoz generates revenue primarily through the sale of its generic drugs and biosimilars. The company's revenue model is based on pricing strategies that allow for competitive pricing against branded counterparts while maintaining margins. Key revenue streams include the direct sales of generic pharmaceuticals to wholesalers, pharmacies, and healthcare providers, as well as sales of biosimilars that offer cost-effective alternatives to expensive biologic treatments. Additionally, Sandoz benefits from strategic partnerships with healthcare systems and collaborations with other pharmaceutical companies for the development and commercialization of new products. The global trend towards increased acceptance of generics and biosimilars, driven by healthcare cost containment efforts, significantly contributes to Sandoz's earnings.
Sandoz Group Ltd Sponsored ADR Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Feb 25, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted a strong first half performance driven by strategic launches and financial improvements. However, there are challenges related to price erosion and costs associated with separation. The sentiment is balanced with growth opportunities and market challenges.Q2-2025 Updates
Positive Updates
Strong H1 2025 Performance
Sandoz delivered 4% sales growth, or 6% on an underlying basis. The core EBITDA margin expanded by 2.5 percentage points to reach 20%. Core diluted earnings per share grew by 33% at constant currency.
Successful Biosimilar Launches
Launched Pyzchiva in the U.S., and Pyzchiva auto-injector in Europe. Wyost and Jubbonti were launched in the U.S. as the first interchangeable denosumab biosimilars.
Pipeline and Manufacturing Expansion
Sandoz announced the expansion of its manufacturing capabilities in Slovenia and the planned acquisition of Just-Evotec Biologics' facilities in France.
Financial Flexibility Improved
Management free cash flow more than doubled to over $500 million, enhancing financial flexibility.
Strong Regional Growth
Europe sales grew by 6%, with strong contributions from biosimilars. International sales grew by an underlying 13% in Q2.
Negative Updates
Price Erosion Impact
Price erosion returned to a more familiar 3 percentage points, impacting the core gross profit margin which declined by around 1 percentage point.
U.S. Biosimilar Market Challenges
Biosimilars in North America showed softer performance versus consensus, with expected stronger growth only in the second half.
Separation Costs
One-off costs related to the separation from the former parent and rationalization of manufacturing sites totaled $176 million in H1, with full year expectations around $500 million.
Company Guidance
In the recent call, Sandoz provided robust guidance for the fiscal year, projecting mid-single-digit net sales growth at constant currencies and a core EBITDA margin of around 21%. The company reported a strong first half with a 4% increase in sales, which translates to 6% on an underlying basis. This growth was driven by biosimilars, which contributed 30% of net sales in Q2. The core EBITDA margin expanded by 2.5 percentage points, reaching 20%, attributed to an improved sales mix and operational efficiency. Sandoz also highlighted its strategic moves, including the expansion of manufacturing capabilities in Slovenia and a planned $300 million acquisition of Just-Evotec Biologics in France. This acquisition aims to bolster Sandoz's biosimilars platform and capitalize on significant growth opportunities in this sector. Additionally, Sandoz reaffirmed its confidence in the midterm outlook, with a strong focus on biosimilars and a robust pipeline of 27 assets targeting $200 billion in originator sales.Sandoz Group Ltd Sponsored ADR Financial Statement Overview
Summary
Sandoz Group demonstrates moderate revenue growth and stable gross margins, but faces profitability challenges. The balance sheet remains robust with a healthy equity ratio, although there is an increase in leverage. Cash flow positions have improved, but the lack of net income in 2024 raises concerns about sustainable profitability and operational efficiency.Income Statement
Sandoz Group's revenue has shown a moderate growth of 3.99% from 2023 to 2024. However, the net profit margin is concerning as the company reported a net income of zero in 2024, down from a previous net income of $77 million in 2023, indicating pressure on profitability. Gross profit margin remains strong at 47.43%, but the decline in EBIT margin to 2.96% suggests operational challenges.65
Positive
Balance Sheet
The company maintains a stable equity position with an equity ratio of 41.01%. However, the debt-to-equity ratio has increased slightly to 0.59, indicating a moderate level of leverage. Return on equity is significantly affected due to the net income of zero in 2024, highlighting a need for improved profitability.70
Positive
Cash Flow
Free cash flow has improved from a negative position in 2023 to a positive $60 million in 2024, indicating better cash management. However, the operating cash flow to net income ratio is not meaningful due to zero net income, suggesting reliance on non-operational cash flow sources.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 9.01B | 10.38B | 9.98B | 8.60B | 8.79B | 9.04B |
| Gross Profit | 4.22B | 4.93B | 4.56B | 4.05B | 4.15B | 4.16B |
| EBITDA | 833.65M | 742.00M | 857.00M | 1.53B | 1.67B | 1.31B |
| Net Income | 163.00M | 1.00M | 77.00M | 784.05M | 830.15M | 433.64M |
Balance Sheet | ||||||
| Total Assets | 21.61B | 19.91B | 19.43B | 16.23B | 15.98B | 15.86B |
| Cash, Cash Equivalents and Short-Term Investments | 1.39B | 1.19B | 1.11B | 74.00M | 36.45M | 34.47M |
| Total Debt | 5.69B | 4.85B | 4.55B | 3.87B | 4.51B | 4.68B |
| Total Liabilities | 12.79B | 11.74B | 10.78B | 22.86K | 8.55B | 9.04B |
| Stockholders Equity | 8.82B | 8.16B | 8.64B | 77.14K | 7.43B | 6.82B |
Cash Flow | ||||||
| Free Cash Flow | 424.48M | 60.00M | -263.00M | 760.23M | 855.75M | 720.86M |
| Operating Cash Flow | 802.40M | 656.00M | 362.00M | 1.17B | 1.24B | 1.03B |
| Investing Cash Flow | -667.91M | -740.00M | -614.00M | -430.00M | -631.76M | -514.36M |
| Financing Cash Flow | 320.25M | 242.00M | 1.24B | -769.00M | -600.67M | -513.42M |
Sandoz Group Ltd Sponsored ADR Technical Analysis
Positive
75.80
Price Trends
71.69
Positive
66.45
Positive
58.72
Positive
Market Momentum
1.35
Negative
64.41
Neutral
93.12
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SDZNY, the sentiment is Positive. The current price of 75.8 is above the 20-day moving average (MA) of 74.38, above the 50-day MA of 71.69, and above the 200-day MA of 58.72, indicating a bullish trend. The MACD of 1.35 indicates Negative momentum. The RSI at 64.41 is Neutral, neither overbought nor oversold. The STOCH value of 93.12 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SDZNY.
Sandoz Group Ltd Sponsored ADR Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $10.91B | 16.02 | 17.72% | 0.64% | 10.63% | 6.35% | |
68 Neutral | $33.36B | 142.32 | 2.68% | 0.98% | ― | ― | |
63 Neutral | $51.86B | 193.71 | 0.54% | 3.86% | -1.98% | -86.20% | |
60 Neutral | $14.79B | ― | -21.09% | 3.99% | -6.40% | -320.23% | |
60 Neutral | $37.01B | 51.87 | 10.77% | ― | -0.25% | ― | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
49 Neutral | $2.09B | -39.90 | -0.65% | 8.48% | -2.55% | 66.00% |
* Healthcare Sector Average
SDZNY
Sandoz Group Ltd Sponsored ADR
77.31
33.14
75.03%
RDY
Dr Reddy's Laboratories
12.92
-1.81
-12.29%
VTRS
Viatris
12.86
2.08
19.29%
PRGO
Perrigo Company
15.03
-8.11
-35.05%
TEVA
Teva Pharmaceutical
31.76
9.94
45.55%
TAK
Takeda Pharmaceutical Company
16.16
3.51
27.79%
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.