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Roche Holding Ltd (CH:RO)
:RO
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Roche Holding Ltd
(RO)
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Rating:74Outperform
Price Target:
CHF306.00
▲(14.09% Upside)
Roche Holding Ltd's overall stock score of 74 reflects its strong financial performance, particularly in cash flow management, and a positive outlook from the latest earnings call. The technical analysis suggests caution due to bearish indicators, and the valuation indicates potential overvaluation. However, the company's robust dividend yield and strategic advancements in pharmaceuticals provide a solid foundation for future growth.
Roche Holding Ltd (RO) vs. iShares MSCI Switzerland ETF (EWL)
Market Cap
CHF203.14B
Dividend Yield3.62%
Average Volume (3M)25.67K
Price to Earnings (P/E)22.4
Beta (1Y)1.24
Revenue Growth4.77%
EPS Growth-11.07%
CountryCH
Employees103,249
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - General
Share Statistics
EPS (TTM)11.08
Shares Outstanding106,691,000
10 Day Avg. Volume30,592
30 Day Avg. Volume25,671
Financial Highlights & Ratios
PEG Ratio-0.88
Price to Book (P/B)6.41
Price to Sales (P/S)3.26
P/FCF Ratio13.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
CHF306.00Price Target Upside14.09% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Roche Holding Ltd Business Overview & Revenue Model
Company DescriptionRoche Holding AG engages in the pharmaceuticals and diagnostics businesses in Switzerland, Germany, the United States, Austria, Netherlands, the United Kingdom, France, Belgium, and internationally. The company offers pharmaceutical products for treating oncology, neuroscience, infectious, immunology, cardiovascular and metabolism, ophthalmology, and respiratory, as well as anemia, cancer, dermatology, hemophilia, inflammatory and autoimmune, neurological, and transplantation. It also offers in vitro tests for the diagnosis of various diseases, such as cancer, diabetes, Covid-19, hepatitis, human papillomavirus, and other diseases. In addition, the company supplies diagnostic instruments and reagents. The company was founded in 1896 and is headquartered in Basel, Switzerland.
How the Company Makes MoneyRoche Holding Ltd generates revenue primarily through the development, manufacturing, and marketing of pharmaceutical products and diagnostic solutions. The Pharmaceuticals Division is the largest contributor to the company's revenue, driven by sales of innovative prescription medicines, particularly in oncology and immunology. Key drugs such as Herceptin, Avastin, and Rituxan have been significant revenue drivers. The Diagnostics Division, another vital revenue stream, offers products and services for medical testing and research, including clinical chemistry and immunoassays, molecular diagnostics, tissue diagnostics, and point-of-care diagnostics. Roche's strategic partnerships with healthcare providers, governmental health authorities, and research institutions further enhance its revenue potential by expanding market reach and accelerating the development of new products. Additionally, Roche invests heavily in research and development to maintain its competitive edge and ensure a steady flow of new and improved healthcare solutions.
Roche Holding Ltd Earnings Call Summary
Earnings Call Date:Jul 24, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Jan 29, 2026
Earnings Call Sentiment Positive
The earnings call reflected a generally positive outlook with strong financial performance and significant advancements in pharmaceuticals and pipeline developments, despite challenges in the Diagnostics segment and market uncertainties.Q2-2025 Updates
Positive Updates
Strong Overall Financial Performance
The group sales increased by 7%, with Pharmaceuticals growing by 10%, and core operating profit growing by 11%. Core EPS grew by 12%.
Pharmaceutical Achievements
Pharmaceutical segment showed strong growth with key products like Phesgo and Xolair driving a significant portion of the increase, including a 55% growth for Phesgo.
Pipeline Development
Progress in the pipeline with 4 medicines moving into Phase III, including promising developments in Parkinson's disease and a potential new antibiotic for gram-negative bacteria.
Diagnostics Regulatory Approvals
Diagnostics division received two approvals and is preparing for the launch of a new sequencing solution expected to be disruptive in terms of throughput, cost, and accuracy.
Negative Updates
Diagnostics Segment Impacted by China Reforms
The Diagnostics segment was flat due to the China healthcare pricing reforms, which significantly impacted sales.
Mixed Results in Clinical Trials
Mixed results were reported with astegolimab, where one study was positive and another negative.
Currency Impact
A negative impact from currency fluctuations, particularly the strengthening of the Swiss franc against major currencies, which affected financial results.
Challenges in the U.S. Market
Discussion of potential policy changes in the U.S., including tariffs and pricing reforms, which introduce uncertainty.
Company Guidance
During the call, Roche provided extensive guidance on its financial and operational performance. The company reported a 7% increase in group sales, driven primarily by a 10% growth in the Pharmaceuticals division, which further accelerated to 11% in Q2. Core operating profit rose by 11%, leading to a 1.1 percentage point increase in the core operating margin, while core EPS grew by 12%. The Diagnostics division remained flat due to the impact of China’s healthcare pricing reforms; however, without these, it would have grown by 6%. Roche revised its full-year LOE impact guidance from CHF 1.2 billion to CHF 1 billion. Significant product milestones included the EU approval of Itovebi and U.S. approval of Susvimo. The company highlighted strong momentum in its product portfolio, with Vabysmo growing by 18% and Xolair serving over 60,000 patients in the U.S. Roche also emphasized its strategic focus on R&D efficiency, resulting in cost savings of CHF 1 billion and a target of CHF 3 billion by 2030. The call concluded with a reaffirmation of Roche's conservative financial guidance, citing geopolitical uncertainties, and a promise to deliver consistent performance.Roche Holding Ltd Financial Statement Overview
Summary
Roche Holding Ltd demonstrates a solid financial position with strong operational efficiency and cash flow management. While the income statement reflects stable revenues and margins, the recent decline in net profit margin and return on equity is a concern. The balance sheet shows increased leverage, which may pose risks if not managed properly. Overall, the company is financially sound, with significant strengths in cash flow generation that can support future growth or debt repayment.Income Statement
Roche Holding Ltd has shown stable revenue figures over the years, with a slight dip in revenue from 2022 to 2023 followed by a minor increase in 2024. The gross profit margin remains strong at approximately 73.9% in 2024. However, the net profit margin decreased from 19% in 2023 to 13.3% in 2024. This decline in profitability is a concern. Despite this, the company maintains a robust EBIT margin of 21.5% and an EBITDA margin of 26.6% in 2024, indicating efficient operational management.75
Positive
Balance Sheet
The debt-to-equity ratio increased from 1.05 in 2023 to 1.14 in 2024, suggesting a higher reliance on debt financing. Return on equity dropped from 39.2% in 2023 to 26.1% in 2024, which may raise concerns about profitability and efficiency. The equity ratio stands at 31.2% in 2024, indicating a solid equity base. While the balance sheet reflects strong asset management, increasing leverage could be a potential risk factor.70
Positive
Cash Flow
Free cash flow has grown impressively by 31.8% from 2023 to 2024, indicating strong cash-generating ability. The operating cash flow to net income ratio improved significantly to 2.43 in 2024, reflecting better cash management and operational efficiency. The free cash flow to net income ratio also increased to 1.82, suggesting a strong cash flow position relative to net income.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 46.57B | 62.40B | 60.44B | 63.28B | 62.80B | 58.32B |
| Gross Profit | 34.25B | 46.11B | 44.08B | 44.44B | 43.10B | 41.97B |
| EBITDA | 12.50B | 16.62B | 18.41B | 20.80B | 22.19B | 22.97B |
| Net Income | 5.72B | 8.28B | 11.50B | 12.42B | 13.93B | 14.29B |
Balance Sheet | ||||||
| Total Assets | 94.77B | 101.80B | 90.47B | 88.15B | 92.32B | 86.14B |
| Cash, Cash Equivalents and Short-Term Investments | 12.03B | 17.32B | 10.51B | 9.77B | 13.03B | 12.33B |
| Total Debt | 34.63B | 36.35B | 30.78B | 26.54B | 32.55B | 15.41B |
| Total Liabilities | 61.72B | 65.64B | 57.20B | 56.14B | 63.97B | 46.37B |
| Stockholders Equity | 28.68B | 31.77B | 29.32B | 27.99B | 24.49B | 36.34B |
Cash Flow | ||||||
| Free Cash Flow | 12.59B | 15.09B | 11.45B | 13.34B | 16.02B | 11.47B |
| Operating Cash Flow | 15.23B | 20.09B | 16.09B | 17.89B | 20.57B | 18.16B |
| Investing Cash Flow | -6.91B | -11.39B | -10.64B | -3.57B | -6.55B | -9.08B |
| Financing Cash Flow | -8.28B | -6.82B | -4.24B | -15.72B | -12.70B | -9.24B |
Roche Holding Ltd Technical Analysis
Negative
268.20
Price Trends
273.25
Negative
275.55
Negative
281.96
Negative
Market Momentum
-1.49
Positive
42.12
Neutral
6.18
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:RO, the sentiment is Negative. The current price of 268.2 is below the 20-day moving average (MA) of 278.10, below the 50-day MA of 273.25, and below the 200-day MA of 281.96, indicating a bearish trend. The MACD of -1.49 indicates Positive momentum. The RSI at 42.12 is Neutral, neither overbought nor oversold. The STOCH value of 6.18 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CH:RO.
Roche Holding Ltd Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | CHF187.28B | 16.46 | 32.52% | 3.56% | 9.36% | -14.82% | |
74 Outperform | CHF203.14B | 22.40 | ― | 3.62% | 4.77% | -11.07% | |
71 Outperform | CHF32.17B | 98.00 | 2.97% | 0.11% | 6.22% | ― | |
69 Neutral | CHF35.68B | 49.28 | 6.82% | 0.77% | 5.93% | 29.83% | |
66 Neutral | CHF29.45B | 31.13 | 4.72% | 0.48% | 1.60% | -4.40% | |
51 Neutral | CHF20.57B | 104.24 | 0.01% | 1.28% | ― | ― | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
CH:RO
Roche Holding Ltd
268.20
-12.45
-4.44%
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CH:LONN
Lonza Group Ltd
519.80
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-2.09%
CH:ALC
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-29.74%
CH:SDZ
Sandoz Group Ltd
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37.17%
CH:GALD
Galderma Group AG
136.30
57.83
73.70%
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.