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SGS SA
(SGSN)
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Rating:68Neutral
Price Target:
CHF112.00
▲(19.68% Upside)
Action:Reiterated
Date:10/25/26
The score is mainly supported by strong operating performance and cash generation plus a positive earnings-call read-through with reaffirmed guidance and improving margins/FCF. Offsetting this are elevated balance-sheet risk from high leverage and a relatively rich valuation (P/E ~30). Technically, the uptrend is intact, but overbought momentum indicators add near-term risk.
Positive Factors
Strong Cash Generation
Consistently strong operating cash flow and high free cash flow demonstrate that SGS converts its assurance activities into substantial internal funding. This supports investment, debt service, acquisitions, and shareholder returns while providing resilience across the business cycle.
Negative Factors
High Leverage and Thin Equity
High debt relative to equity leaves SGS with limited balance-sheet flexibility despite strong cash generation. Elevated leverage can increase financing sensitivity, constrain acquisition capacity, and reduce the company's ability to absorb weaker operating conditions without adjusting capital allocation.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Cash Generation
Consistently strong operating cash flow and high free cash flow demonstrate that SGS converts its assurance activities into substantial internal funding. This supports investment, debt service, acquisitions, and shareholder returns while providing resilience across the business cycle.
Read all positive factors
SGS SA (SGSN) vs. iShares MSCI Switzerland ETF (EWL)
Market Cap
CHF20.60B
Dividend Yield3.09%
Average Volume (3M)344.09K
Price to Earnings (P/E)30.4
Beta (1Y)0.80
Revenue Growth4.72%
EPS Growth3.37%
CountryCH
Employees83,000
SectorGeneral
Sector StrengthN/A
IndustryConsulting Services
Share Statistics
EPS (TTM)3.41
Shares Outstanding199,439,180
10 Day Avg. Volume399,471
30 Day Avg. Volume344,090
Financial Highlights & Ratios
PEG Ratio2.00
Price to Book (P/B)18.69
Price to Sales (P/S)2.43
P/FCF Ratio17.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
CHF106.50Price Target Upside13.81% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)4.14
Revenue Forecast (FY)CHF7.70B
SGS SA Business Overview & Revenue Model
Company Description
Established in Geneva, Switzerland, in 1878, SGS SA is a prominent global provider specializing in inspection, verification, testing, certification, and quality assurance services. Its extensive operations reach across Europe, Africa, the Middle E...
How the Company Makes Money
SGS makes money primarily by charging fees for services delivered across the TIC value chain—testing, inspection, and certification—generally on a per-project, per-sample, per-audit, or contract basis.
Key revenue streams typically include:
1) Te...
SGS SA Earnings Call Summary
Earnings Call Date:Jul 24, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Feb 11, 2027
Earnings Call Sentiment Positive
The call presents a broadly positive performance: strong organic growth (5.6%), robust margin expansion (adjusted operating margin 15.1%, +20 bps), record free cash flow (CHF 260m, +25%) and EPS growth (+14.5%). Growth engines Digital Trust, Sustainability, Connectivity and Minerals showed double- or high-single-digit momentum, and ATS integration and bolt-on M&A are progressing with identified synergies. Key negatives are the Middle East disruption (c. 60–80 bps drag), FX translation headwinds (-5.8% impact), higher net debt following ATS and localized softness/phasing in Pharma, Connectivity and certain regional trade flows. Overall, positives materially outweigh the challenges and management reiterated full-year guidance.Positive Updates
Strong Top-Line Growth
H1 sales of CHF 3.7 billion; constant-currency growth of 13.4% comprising 5.6% organic growth and 7.8% M&A (including ATS). Reported sales growth in Swiss francs was +7.6% after a -5.8% FX translation headwind.
Negative Updates
Middle East Disruption
The conflict in the Middle East reduced organic growth by ~60 basis points in H1 (c. 80 bps impact in Q2) and contributed to EMEA region decline of -2.8%. The disruption hurt Industries & Environment and Oil, Gas & Chemicals activity in the region.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Top-Line Growth
H1 sales of CHF 3.7 billion; constant-currency growth of 13.4% comprising 5.6% organic growth and 7.8% M&A (including ATS). Reported sales growth in Swiss francs was +7.6% after a -5.8% FX translation headwind.
Read all positive updates
Company Guidance
SGS reaffirmed its 2026 guidance after a strong H1: sales CHF3.7bn (13.4% constant‑currency growth = +5.6% organic, +7.8% M&A), organic growth 5.6% (would have been >6% without a ~60bp H1 drag from the Middle East; Q2 drag ~80bp), adjusted operating income margin 15.1% (up 20bps) with organic adjusted OI up CHF39m (≈+30bps) and M&A adding CHF42m (≈+10bps) while FX trimmed results by CHF35m (≈-20bps); free cash flow was CHF260m (+25%), EPS CHF1.58 (+14.5% ex‑HQ disposal), restructuring guidance remains CHF20–40m (H1 CHF18m, ~CHF8m Middle East impact), ATS synergies target CHF30m (at least CHF5m expected this year), expected year‑end net debt/EBITDA ≈2.2x (long‑term target ≈1.7x, preferring <2x) and FCF seasonality roughly 1/3 H1 / 2/3 H2.SGS SA Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
38
Negative
Cash Flow
72
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.21B | 6.95B | 6.79B | 6.62B | 6.64B | 6.41B |
| Gross Profit | 2.68B | 2.61B | 2.48B | 2.36B | 2.41B | 2.34B |
| EBITDA | 1.58B | 1.52B | 1.47B | 1.36B | 1.40B | 1.48B |
| Net Income | 663.00M | 668.00M | 581.00M | 553.00M | 588.00M | 613.00M |
Balance Sheet | ||||||
| Total Assets | 8.47B | 7.88B | 6.75B | 6.76B | 7.12B | 7.01B |
| Cash, Cash Equivalents and Short-Term Investments | 1.30B | 2.33B | 1.21B | 1.57B | 1.62B | 1.48B |
| Total Debt | 5.22B | 5.30B | 3.88B | 4.41B | 4.45B | 3.81B |
| Total Liabilities | 7.34B | 6.89B | 5.87B | 6.23B | 6.36B | 5.80B |
| Stockholders Equity | 1.01B | 901.00M | 797.00M | 459.00M | 682.00M | 1.12B |
Cash Flow | ||||||
| Free Cash Flow | 995.00M | 968.00M | 973.00M | 825.00M | 653.00M | 782.00M |
| Operating Cash Flow | 1.25B | 1.22B | 1.22B | 1.12B | 985.00M | 1.12B |
| Investing Cash Flow | -1.56B | -310.00M | -393.00M | -300.00M | -397.00M | -549.00M |
| Financing Cash Flow | -76.00M | 289.00M | -1.19B | -839.00M | -375.00M | -826.00M |
SGS SA Technical Analysis
Positive
93.58
Price Trends
95.59
Positive
94.91
Positive
91.24
Positive
Market Momentum
2.46
Negative
75.53
Negative
90.33
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:SGSN, the sentiment is Positive. The current price of 93.58 is below the 20-day moving average (MA) of 99.02, below the 50-day MA of 95.59, and above the 200-day MA of 91.24, indicating a bullish trend. The MACD of 2.46 indicates Negative momentum. The RSI at 75.53 is Negative, neither overbought nor oversold. The STOCH value of 90.33 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CH:SGSN.
SGS SA Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | CHF321.78B | 26.26 | ― | 2.63% | -1.06% | 30.86% | |
74 Outperform | CHF6.30B | 42.24 | 10.27% | 1.07% | 4.51% | 11.05% | |
68 Neutral | CHF20.60B | 30.38 | ― | 3.09% | 4.72% | 3.37% | |
67 Neutral | CHF43.90B | -418.31 | ― | 0.78% | -10.77% | -114.77% | |
62 Neutral | CHF5.01B | 22.81 | ― | 3.24% | -1.37% | 8.55% | |
61 Neutral | CHF28.17B | 28.89 | ― | 2.53% | 1.09% | -5.24% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% |
* General Sector Average
CH:SGSN
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103.60
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18.75%
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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.