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Lonza Group Ltd
(LONN)
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Rating:67Neutral
Price Target:
CHF677.00
▲(15.06% Upside)
Action:Reiterated
Date:10/23/26
The score is driven primarily by a very constructive latest earnings update (upgraded margin guidance, strong organic growth, and improved free cash flow). Offsetting this are weaker historical cash-flow quality (multi-year negative free cash flow) and a valuation profile that is difficult to support using earnings (negative P/E) with only a modest dividend. Technicals are supportive of the trend but appear overextended, adding near-term pullback risk.
Positive Factors
Organic growth and guidance
Strong organic growth across the first half and maintained full-year guidance indicate broad customer demand for Lonza’s CDMO services. Sustained growth can improve site utilization, support operating leverage, and strengthen the company’s ability to fund capacity expansion.
Negative Factors
Persistent free cash flow weakness
Persistent negative free cash flow shows that substantial operating inflows have not consistently covered investment and working-capital needs. This can limit discretionary cash for debt reduction, shareholder distributions, or additional growth initiatives if the pattern continues.
Read all positive and negative factors
Positive Factors
Negative Factors
Organic growth and guidance
Strong organic growth across the first half and maintained full-year guidance indicate broad customer demand for Lonza’s CDMO services. Sustained growth can improve site utilization, support operating leverage, and strengthen the company’s ability to fund capacity expansion.
Read all positive factors
Lonza Group Ltd (LONN) vs. iShares MSCI Switzerland ETF (EWL)
Market Cap
CHF43.06B
Dividend Yield0.79%
Average Volume (3M)136.25K
Price to Earnings (P/E)―
Beta (1Y)1.11
Revenue Growth-10.77%
EPS Growth-114.77%
CountryCH
Employees20,141
SectorGeneral
Sector StrengthN/A
IndustryBiotechnology
Share Statistics
EPS (TTM)-1.54
Shares Outstanding70,229,020
10 Day Avg. Volume163,291
30 Day Avg. Volume136,253
Financial Highlights & Ratios
PEG Ratio0.95
Price to Book (P/B)4.12
Price to Sales (P/S)5.77
P/FCF Ratio-184.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
CHF716.33Price Target Upside21.74% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)18.18
Revenue Forecast (FY)CHF7.12B
Lonza Group Ltd Business Overview & Revenue Model
Company Description
Lonza Group AG, together with its subsidiaries, operates as a contract development and manufacturing organization for pharma and biotech companies in Europe, North and Central America, Latin America, Asia, Australia, New Zealand, and international...
How the Company Makes Money
Lonza makes money primarily by providing fee-based contract development and manufacturing services to third-party customers. Its core revenue model is built around (1) development services (process development, analytical development, and other te...
Lonza Group Ltd Earnings Call Summary
Earnings Call Date:Jul 22, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Jan 27, 2027
Earnings Call Sentiment Positive
The call conveyed a clearly positive operational and financial story: strong organic top-line growth (16% CER), material margin expansion (CORE EBITDA margin +4.4pp to 34.8%), markedly improved free cash flow, platform-level recovery and high-margin performance in Advanced Synthesis, and completion of the strategic transformation to a pure-play CDMO with a CHF 2.3bn divestment. Management upgraded margin guidance while reconfirming full-year CER sales growth of 11%-12% and outlined disciplined, high-return investments. Key near-term headwinds are FX translation effects, H2 phasing (including a planned Vacaville shutdown), elevated trade working capital, and expected margin normalization in H2 for some units after an exceptionally strong H1. Overall, the positives—robust organic growth, margin and cash-flow improvements, strategic clarity and targeted capacity investments—substantially outweigh the operational timing and FX headwinds.Positive Updates
Strong top-line growth
H1 2026 sales of CHF 3.4 billion, organic CER sales growth of 16% versus H1 2025 (entirely organic), and year-to-date momentum across all businesses.
Negative Updates
FX headwinds reduced reported growth
Reported sales growth in actual exchange rates was 11.2% (vs 16% CER), reflecting an FX headwind of almost 5 percentage points in H1 2026; full-year FX drag expected to be -2% to -3% on growth.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong top-line growth
H1 2026 sales of CHF 3.4 billion, organic CER sales growth of 16% versus H1 2025 (entirely organic), and year-to-date momentum across all businesses.
Read all positive updates
Company Guidance
The company upgraded 2026 guidance to a CORE EBITDA margin of 33–34% and reconfirmed expected CER sales growth of 11–12% (with an anticipated FX drag of –2 to –3 percentage points for the year); this follows a strong H1 (sales CHF 3.4bn, CER sales growth 16%, CORE EBITDA CHF 1.2bn and margin 34.8% up 4.4pp, CORE EBITDA growth +27.4%, free cash flow CHF 426m, ROIC ~13.2%), H1 CapEx CHF 530m (15.7% of sales), and an ongoing CapEx intensity target of mid‑ to high‑teens % of sales, including >CHF7bn organic CapEx planned to 2030 (investment return thresholds: IRR ≥15%, peak ROIC ≥30%); by platform they expect Integrated Biologics c. CHF 1.87bn H1 sales (+10% CER, 36% margin), Advanced Synthesis +27–28% CER (48.1% margin), and Specialized Modalities +22.6% CER (28% margin), with site‑level notes such as Vacaville ~CHF 0.6bn full‑year sales and project ramp timelines (e.g., ADC payload/linker ramp from 2029–2030, peak sales by mid‑2030s).Lonza Group Ltd Financial Statement Overview
Summary
Income Statement
63
Positive
Balance Sheet
74
Positive
Cash Flow
41
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 6.33B | 6.53B | 5.48B | 6.72B | 6.22B | 5.41B |
| Gross Profit | 2.31B | 2.30B | 1.97B | 1.82B | 2.30B | 1.97B |
| EBITDA | 2.15B | 2.03B | 1.74B | 1.48B | 1.95B | 1.34B |
| Net Income | -110.00M | -275.00M | 636.00M | 654.00M | 1.22B | 2.94B |
Balance Sheet | ||||||
| Total Assets | 18.26B | 18.97B | 19.73B | 16.85B | 17.36B | 16.46B |
| Cash, Cash Equivalents and Short-Term Investments | 487.00M | 719.00M | 1.71B | 1.67B | 2.22B | 3.18B |
| Total Debt | 4.17B | 4.54B | 5.12B | 3.13B | 2.59B | 2.75B |
| Total Liabilities | 10.11B | 9.78B | 10.35B | 7.34B | 6.69B | 6.64B |
| Stockholders Equity | 8.12B | 9.13B | 9.33B | 9.45B | 10.60B | 9.75B |
Cash Flow | ||||||
| Free Cash Flow | 163.00M | -204.00M | -143.00M | -263.00M | -833.00M | -126.00M |
| Operating Cash Flow | 1.44B | 1.17B | 1.27B | 1.39B | 1.04B | 1.22B |
| Investing Cash Flow | -1.16B | -732.00M | -2.92B | -1.10B | -991.00M | 1.02B |
| Financing Cash Flow | -639.00M | -755.00M | 1.28B | -152.00M | -286.00M | -1.28B |
Lonza Group Ltd Technical Analysis
Positive
588.40
Price Trends
574.81
Positive
561.30
Positive
533.43
Positive
Market Momentum
16.45
Negative
73.63
Negative
93.73
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:LONN, the sentiment is Positive. The current price of 588.4 is below the 20-day moving average (MA) of 589.44, above the 50-day MA of 574.81, and above the 200-day MA of 533.43, indicating a bullish trend. The MACD of 16.45 indicates Negative momentum. The RSI at 73.63 is Negative, neither overbought nor oversold. The STOCH value of 93.73 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CH:LONN.
Lonza Group Ltd Peers Comparison
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Lonza Group Ltd Corporate Events
Lonza Raises Growth Targets After Completing Pure-Play CDMO Transformation
Oct 14, 2026
Lonza has completed its transformation into a focused, pure-play CDMO by exiting non-core activities such as Capsules Health Ingredients and streamlining its global operations. This strategic repositioning is intended to create a more integrated ...
Lonza Secures Exclusive CDK7 Inhibitor Rights to Boost Dual-Payload ADC Platform
Oct 12, 2026
Lonza has entered an exclusive license agreement with Qurient to integrate Qurient’s clinical-stage CDK7 inhibitors into dual-payload antibody-drug conjugate platforms, expanding its toolbox for next-generation cancer therapies. The collabor...
Lonza Strengthens Board with Nomination of Biotech Veteran Pearl Huang
Sep 30, 2026
Lonza has nominated pharmaceutical and biotechnology veteran Pearl Huang as an independent member of its Board of Directors, with her election to be decided at the company’s Annual General Meeting in May 2027. If approved, Huang will join Lo...
Lonza to Build Major Spray-Drying Plant in Oregon, Expanding U.S. CDMO Capacity
Sep 10, 2026
Lonza plans to build a large-scale commercial spray-drying facility in Bend, Oregon, adding PSD-4 capacity to meet rising demand for spray-dried dispersion technologies in drug development. The expansion will reinforce Bend as a center of excellen...
Lonza Creates Chief Commercial Officer Role and Appoints Samanta Cimitan
Aug 26, 2026
Lonza has appointed industry veteran Samanta Cimitan as Chief Commercial Officer, Senior Vice President and member of the Extended Executive Committee, effective by 1 January 2027. The newly created role covers Strategic Enterprise Account Managem...
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.