Lonza Group (LZAGY) AI Stock Analysis

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Lonza Group

(OTC:LZAGY)

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Neutral 69 (OpenAI - 4o)

Rating:69Neutral

Price Target:

$76.00

▲(11.81% Upside)

Lonza Group's overall stock score reflects a stable financial performance with strong profitability and operational efficiency. The positive earnings call sentiment and upgraded guidance are significant strengths. However, high valuation metrics and technical indicators suggest caution. Addressing cash flow challenges and maintaining growth are crucial for future performance.

Lonza Group (LZAGY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$46.70B

Dividend Yield0.62%

Average Volume (3M)1.42K

Price to Earnings (P/E)55.8

Beta (1Y)0.93

Revenue Growth8.41%

EPS Growth33.09%

CountryUS

Employees17,995

SectorHealthcare

Sector Strength45

IndustryMedical - Diagnostics & Research

Share Statistics

EPS (TTM)0.95

Shares Outstanding702,290,200

10 Day Avg. Volume0

30 Day Avg. Volume1,423

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap1.17

Enterprise Value/Revenue8.30

Enterprise Value/Gross Profit25.25

Enterprise Value/Ebitda35.37

Forecast

1Y Price Target

$85.40

Price Target Upside25.64% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Lonza Group Business Overview & Revenue Model

Company DescriptionLonza Group AG, together with its subsidiaries, supplies various products and services for pharmaceutical, biotech, and nutrition markets in Europe, North and Central America, Latin America, Asia, Australia and New Zealand, and internationally. It operates through Biologics, Small Molecules, Cell & Gene, and Capsules & Health Ingredients segments. The Biologics segment engages in the contract development and manufacturing of biopharmaceuticals for clinical and commercial manufacturing needs throughout the product lifecycle, including drug substance and drug product manufacturing. The Small Molecules segment operates as an integrated development and manufacturing service provider for small molecule drug substances and their intermediates. It supports customers across various aspects of design, development, and manufacturing. The Cell & Gene segment develops technologies and platforms that industrialize the manufacturing processes and production of cell and gene therapies. It also offers contract development and manufacturing services, and regulatory support for a range of allogeneic and autologous cell therapies, and exosome-based therapies, as well as viral vector gene therapies. In addition, this segment provides specialty raw materials and enabling technology solutions in cell and gene therapy, injectable drugs, vaccines, and bio-manufacturing markets. The Capsules & Health Ingredients segment offers capsules, dosage form solutions, and health ingredients for pharmaceutical and nutraceutical customers. The company was founded in 1897 and is headquartered in Basel, Switzerland.

How the Company Makes MoneyLonza generates revenue primarily through its two business segments: Pharma & Biotech, which includes services like custom manufacturing of APIs and biologics, and Specialty Ingredients, which offers products for personal care, nutrition, and microbial control. The company’s revenue model is driven by long-term contracts with pharmaceutical companies, which provide a steady income stream. Key revenue streams include contract manufacturing services, development services for new therapeutics, and sales of specialty chemical products. Additionally, Lonza has formed significant partnerships with leading biotech firms and pharmaceutical companies, enhancing its market position and driving growth through collaborative projects and shared innovation.

Lonza Group Earnings Call Summary

Earnings Call Date:Jul 23, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Jan 28, 2026

Earnings Call Sentiment Positive

The earnings call highlighted strong sales growth and performance in key business segments like Integrated Biologics and Advanced Synthesis, along with an upgraded outlook for the CDMO business. However, challenges such as currency headwinds, sales decline in specialized modalities, and ongoing integration efforts in Vacaville were noted. Despite some lowlights, the strong financial performance and positive outlook suggest a generally favorable business environment.

Q2-2025 Updates

Positive Updates

Strong H1 Sales Growth

Lonza reported CHF 3.6 billion in sales across the group, with a 19% constant exchange rate (CER) sales growth compared to 2024.

CDMO Business Performance

The CDMO business excluding CHI saw 23.1% sales growth, leading to a core EBITDA margin slightly above 30%.

Upgraded CDMO Outlook

The company raised its guidance with an upgraded CDMO outlook for full year 2025 of 20% to 21% CER sales growth and a core EBITDA margin of 30% to 31%.

Integrated Biologics Growth

Integrated Biologics reported almost 40% CER sales growth compared to H1 2024, with a core EBITDA margin increase to 36%.

Advanced Synthesis Margin Improvement

Advanced synthesis reported a core EBITDA margin of 40.3%, a 6.9 percentage point increase versus H1 2024.

Capsules and Health Ingredients Recovery

Capsules and Health Ingredients showed flat sales growth versus H1 2024, with a core EBITDA margin increase to 26.2%.

Negative Updates

Currency Impact on Sales

Group sales in H1 were affected by a negative 2% currency headwind due to the Swiss franc appreciation against the U.S. dollar.

Specialized Modalities Sales Decline

Specialized modalities reported a CER sales decline of 9.2% and a core EBITDA margin decrease to 17.3%, impacted by pipeline variability and operational challenges in cell and gene therapy.

Higher Corporate Costs

Higher corporate costs due to FX hedging, increased social security, and insurance contributions impacted margins.

Vacaville Margin Neutrality

Vacaville margins are expected to become neutral to the group towards the end of the next 3 to 4 years, implying ongoing integration and portfolio shift challenges.

Company Guidance

During the Half Year Results 2025 Investor and Analyst Conference Call, Lonza provided an optimistic outlook for the remainder of the fiscal year, driven by a robust performance in the first half. The company reported CHF 3.6 billion in sales, marking a 19% constant exchange rate (CER) sales growth compared to 2024, and a core EBITDA of CHF 1.1 billion with a margin of 29.6%. The CDMO business saw a 23.1% sales increase, leading to a core EBITDA margin exceeding 30%. As a result, Lonza upgraded its full-year 2025 guidance, forecasting a 20% to 21% CER sales growth and a core EBITDA margin of 30% to 31%. The company emphasized its strategic focus on its three new CDMO business platforms: integrated biologics, advanced synthesis, and specialized modalities, alongside the Capsules and Health Ingredients (CHI) segment, which is on track for a planned exit. Despite macroeconomic and geopolitical uncertainties, Lonza remains confident in its ability to continue delivering strong results, attributing its success to disciplined cost management, high asset utilization, and strategic investments across its business platforms.

Lonza Group Financial Statement Overview

Summary

Lonza Group shows a mixed financial picture with strong profitability and operational efficiency. However, inconsistent revenue growth and negative free cash flow due to high capital expenditures are concerns. The balance sheet is stable, but increasing liabilities need attention.

Income Statement

Positive

Lonza Group's income statement reflects stable revenue with a slight decline from the previous year. The gross profit margin and net profit margin are healthy, indicating good profitability. However, the revenue growth rate has been inconsistent, with a recent decrease. The EBIT and EBITDA margins show strong operational efficiency, but the net income has declined from its peak in 2021, suggesting some challenges in maintaining profitability growth.

Balance Sheet

Positive

The balance sheet is robust, with a solid equity base and a moderate debt-to-equity ratio, ensuring financial stability. Return on Equity (ROE) is positive but has declined, pointing to decreased efficiency in generating profits from shareholders' equity. The equity ratio is strong, indicating a healthy proportion of assets financed by shareholders' equity. However, the increase in total liabilities over time is a concern that needs monitoring.

Cash Flow

Positive

Lonza Group's cash flow situation shows mixed results. Operating cash flow remains strong, although free cash flow is negative, primarily due to significant capital expenditures. The operating cash flow to net income ratio suggests effective cash generation from operations, but the negative free cash flow to net income ratio highlights challenges in covering capital expenditures from operating activities.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.57B	6.72B	6.22B	5.41B	4.51B
Gross Profit	2.16B	1.95B	2.30B	1.97B	1.71B
EBITDA	1.54B	1.53B	2.12B	1.38B	1.39B
Net Income	636.00M	654.00M	1.22B	2.94B	869.00M
Balance Sheet
Total Assets	19.73B	16.85B	17.56B	16.69B	14.63B
Cash, Cash Equivalents and Short-Term Investments	1.71B	1.67B	2.22B	3.18B	495.00M
Total Debt	5.12B	3.13B	2.59B	2.75B	3.81B
Total Liabilities	10.35B	7.34B	6.89B	6.87B	7.74B
Stockholders Equity	9.33B	9.45B	10.60B	9.75B	6.82B
Cash Flow
Free Cash Flow	-143.00M	-263.00M	-833.00M	-126.00M	163.00M
Operating Cash Flow	1.27B	1.39B	1.04B	1.22B	1.14B
Investing Cash Flow	-2.92B	-1.10B	-991.00M	1.02B	-1.09B
Financing Cash Flow	1.28B	-152.00M	-286.00M	-1.28B	93.00M

Lonza Group Technical Analysis

Technical Analysis Sentiment

Negative

Last Price67.97

Price Trends

50DMA

70.04

Negative

100DMA

69.83

Negative

200DMA

66.28

Positive

Market Momentum

MACD

-0.43

Positive

RSI

39.56

Neutral

STOCH

-0.07

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LZAGY, the sentiment is Negative. The current price of 67.97 is below the 20-day moving average (MA) of 70.33, below the 50-day MA of 70.04, and above the 200-day MA of 66.28, indicating a neutral trend. The MACD of -0.43 indicates Positive momentum. The RSI at 39.56 is Neutral, neither overbought nor oversold. The STOCH value of -0.07 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LZAGY.

Lonza Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (51)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IQV	79 Outperform	31.93B	27.01	21.41%	―	3.53%	-10.72%
A	79 Outperform	35.81B	29.62	19.15%	0.78%	4.48%	-11.52%
TMO	72 Outperform	179.36B	27.49	13.03%	0.36%	2.05%	7.03%
DHR	69 Neutral	136.38B	40.45	6.52%	0.62%	-3.24%	-16.60%
MTD	69 Neutral	25.91B	31.84	-320.62%	―	3.11%	8.50%
LZAGY	69 Neutral	$46.70B	55.83	7.97%	0.62%	8.41%	33.09%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

* Healthcare Sector Average

Performance Comparison

LZAGY

Lonza Group

67.97

5.11

8.13%

Agilent

125.94

-14.85

-10.55%

DHR

Danaher

189.72

-83.04

-30.44%

MTD

Mettler-Toledo

1,257.03

-185.63

-12.87%

TMO

Thermo Fisher

469.75

-139.98

-22.96%

IQV

IQVIA Holdings

186.45

-53.12

-22.17%

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.Date of analysis: Sep 11, 2025