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Roche Holding
(OTC:RHHBY)
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Rating:71Outperform
Price Target:
$57.00
â–¼(-0.82% Downside)
Action:Reiterated
Date:07/23/26
The score is primarily driven by strong profitability and generally solid cash generation, supported by a constructive earnings update with reaffirmed guidance and pipeline momentum. Offsetting this are uneven top-line/FCF growth, meaningful leverage, and only neutral technical momentum. Valuation and the ~3% dividend are supportive but not a major catalyst.
Positive Factors
High margins & profitability
Roche’s sustained high gross and EBIT margins reflect durable pricing power across patented pharmaceuticals and diagnostics consumables. Strong operating leverage and a 2025 net margin rebound (~21%) support long-term internal funding for R&D, dividends and strategic M&A without relying on external financing.
Negative Factors
Elevated leverage
Debt levels near one times equity limit financial flexibility for large opportunistic investments or to weather earnings shocks. If revenue or cash flow softens, servicing and refinancing obligations could constrain R&D spending, dividends or targeted acquisitions over the medium term.
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Positive Factors
Negative Factors
High margins & profitability
Roche’s sustained high gross and EBIT margins reflect durable pricing power across patented pharmaceuticals and diagnostics consumables. Strong operating leverage and a 2025 net margin rebound (~21%) support long-term internal funding for R&D, dividends and strategic M&A without relying on external financing.
Read all positive factors
Roche Holding (RHHBY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$365.11B
Dividend Yield2.75%
Average Volume (3M)1.83M
Price to Earnings (P/E)23.7
Beta (1Y)0.38
Revenue Growth8.13%
EPS Growth42.71%
CountryUS
Employees103,249
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - General
Share Statistics
EPS (TTM)1.94
Shares Outstanding5,620,501,500
10 Day Avg. Volume2,128,806
30 Day Avg. Volume1,826,636
Financial Highlights & Ratios
PEG Ratio0.36
Price to Book (P/B)7.76
Price to Sales (P/S)4.15
P/FCF Ratio19.53
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$63.00Price Target Upside9.62% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)3.11
Revenue Forecast (FY)$77.55B
Roche Holding Business Overview & Revenue Model
Company Description
Roche Holding AG functions as a major global healthcare enterprise, primarily concentrating its efforts within the pharmaceutical and diagnostic sectors. The company boasts an extensive international presence, with key operations located in countr...
How the Company Makes Money
Roche makes money mainly by selling healthcare products and related services through its Pharmaceuticals and Diagnostics divisions. Pharmaceuticals generates revenue from sales of patented prescription drugs and biologics to wholesalers, hospitals...
Roche Holding Earnings Call Summary
Earnings Call Date:Jul 23, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Feb 04, 2027
Earnings Call Sentiment Positive
Overall the call conveyed a positive operating and pipeline momentum despite identifiable headwinds. Roche reported strong profitability (core op profit +10%, margin expansion), solid organic growth in Pharma, multiple regulatory wins (5 priority reviews) and major diagnostics and R&D milestones (AXELIOS launch, CE marks, strategic M&A). Offsetting items include China pricing reform and a weak respiratory season hitting Diagnostics, currency translation pressures, a near‑term net debt increase (timing effects) and some competitive/biosimilar pressure in specific franchises. On balance, the operational and pipeline achievements materially outweigh the manageable challenges described.Positive Updates
Strong profitability and margin expansion
Core operating profit up 10% (constant exchange rates) with core operating margin +1.7 percentage points; core EPS +9% (CER). Operating free cash flow +21% and free cash flow +58% (timing effects), demonstrating strong cash generation and margin discipline.
Negative Updates
China pricing reform significantly weighing on Diagnostics
China sales in Diagnostics declined ~15% (APAC -5% overall), with health‑care pricing reform materially reducing reported Diagnostics growth; excluding China effect Diagnostics would have grown +6%.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong profitability and margin expansion
Core operating profit up 10% (constant exchange rates) with core operating margin +1.7 percentage points; core EPS +9% (CER). Operating free cash flow +21% and free cash flow +58% (timing effects), demonstrating strong cash generation and margin discipline.
Read all positive updates
Company Guidance
Roche confirmed its 2026 guidance: mid‑single‑digit group sales growth (sales are running ~6% YTD) and high‑single‑digit core EPS growth (core EPS up ~9% H1), while reporting core operating profit up 10% YTD and a 1.7 percentage‑point improvement in core operating margin; management reiterated an expected LOE impact of ~CHF 600m for 2026, aims to keep Diagnostics’ margin broadly stable versus 2025 (14.4% CER) with Diagnostics growth targeted at mid‑single‑digits in 2026 (and mid‑ to high‑single‑digits in 2027), expects the core tax rate to normalize toward ~20% for the full year, flagged currency headwinds of roughly -4 p.p. on sales and -6 p.p. on core operating profit/core EPS for the year, said other revenue should rise from ~3% to ~5% of sales by the end of the decade, and confirmed a further increase in the dividend in Swiss francs.Roche Holding Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
67
Positive
Cash Flow
71
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 61.34B | 63.36B | 62.40B | 60.44B | 65.81B | 62.80B |
| Gross Profit | 44.62B | 46.71B | 46.11B | 44.84B | 47.88B | 43.10B |
| EBITDA | 24.82B | 21.70B | 16.62B | 18.41B | 24.07B | 22.19B |
| Net Income | 12.44B | 12.88B | 8.28B | 11.50B | 12.42B | 13.93B |
Balance Sheet | ||||||
| Total Assets | 97.85B | 100.82B | 101.80B | 90.47B | 88.15B | 92.32B |
| Cash, Cash Equivalents and Short-Term Investments | 9.70B | 15.49B | 17.32B | 10.51B | 9.77B | 13.03B |
| Total Debt | 31.69B | 33.19B | 36.35B | 30.78B | 26.54B | 32.55B |
| Total Liabilities | 61.27B | 62.89B | 65.64B | 57.20B | 56.14B | 63.97B |
| Stockholders Equity | 32.58B | 33.84B | 31.77B | 29.32B | 27.99B | 24.49B |
Cash Flow | ||||||
| Free Cash Flow | 15.16B | 13.45B | 15.09B | 11.45B | 13.34B | 16.02B |
| Operating Cash Flow | 18.94B | 17.03B | 20.09B | 16.09B | 17.89B | 20.57B |
| Investing Cash Flow | -7.85B | -8.32B | -11.39B | -10.64B | -3.57B | -6.55B |
| Financing Cash Flow | -13.01B | -9.72B | -6.82B | -4.24B | -15.72B | -12.70B |
Roche Holding Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $650.67B | 30.72 | 25.73% | 1.99% | 8.07% | -7.21% | |
77 Outperform | $161.30B | 37.01 | 4.89% | 7.01% | -0.21% | -59.71% | |
71 Outperform | $365.11B | 23.70 | 37.12% | 2.83% | 8.13% | 42.71% | |
68 Neutral | $289.42B | 23.52 | 29.64% | 3.06% | 2.33% | -4.08% | |
65 Neutral | $464.58B | 72.69 | -136.50% | 2.63% | 10.39% | 68.16% | |
62 Neutral | $377.72B | 118.68 | 6.60% | 2.56% | 4.51% | -80.62% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
RHHBY
Roche Holding
56.39
16.41
41.03%
JNJ
Johnson & Johnson
268.04
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54.70%
MRK
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148.35
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82.25%
NVS
Novartis
153.81
29.69
23.92%
PFE
Pfizer
27.96
4.82
20.85%
ABBV
AbbVie
255.48
51.41
25.19%
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.