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1. Company Snapshot

1.a. Company Description

Roche 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.

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1.b. Last Insights on ROG

Roche Holding's recent momentum is driven by a series of positive developments. The company's Phase III results for investigational drugs fenebrutinib in multiple sclerosis and Gazyva/Gazyvaro in systemic lupus erythematosus showed significant clinical benefits. Additionally, Roche announced FDA approval for Gazyva in lupus nephritis and unveiled positive results in breast cancer treatment. These achievements reflect Roche's research momentum in oncology, autoimmune diseases, and diagnostics. Analysts have modestly increased their fair value estimate, citing promising clinical trial outcomes and strategic partnerships.

1.c. Company Highlights

2. Roche's H1 2025 Earnings: Strong Growth Momentum

Roche's H1 2025 results demonstrate robust financial performance, with group sales increasing by 7% to CHF 24 billion, driven by a 10% growth in Pharmaceuticals, while Diagnostics sales were flat due to China's healthcare pricing reforms. Core operating profit grew 11% to CHF 12 billion, with a margin expansion of 1.1 percentage points. Core EPS grew 12% to CHF 11.08, beating analyst estimates of CHF 10.46. The company's strong operational performance is evident, with core operating profit growing more than sales.

Publication Date: Aug -01

📋 Highlights
  • Pharmaceuticals Growth: Pharmaceuticals division saw 10% growth, driving overall group sales up by 7%.
  • Operating Profit Increase: Core operating profit grew 11% to CHF 12 billion, with a margin expansion of 1.1 percentage points.
  • Key Product Performance: Vabysmo and Hemlibra showed strong growth, with Vabysmo up 18% and Hemlibra contributing to a 19% increase in hematology franchise sales.
  • EPS Growth: Core EPS grew 12%, supported by currency impacts and improved profitability.
  • R&D Pipeline Progress: 4 medicines entered Phase III, with 8-11 more expected by year-end, focusing on best-in-disease potential.

Pharmaceuticals Division Performance

The Pharmaceuticals division continues to drive growth, with sales increasing by 10% to CHF 17.1 billion. The oncology franchise saw sales grow 2% to CHF 7.8 billion, driven by the HER2 franchise, with Phesgo conversion rates approaching 50%. Hematology franchise sales grew 19% to CHF 4.3 billion, driven by Hemlibra's strong performance. Neurology franchise sales reached CHF 4.9 billion, with 10% growth at half year, driven by Ocrevus's good momentum. As Teresa Graham noted, "50% of U.S. patients on SUNMO are Ocrevus naive, coming from both existing sites and new territory."

Diagnostics Division Performance

The Diagnostics division sales were CHF 6.96 billion, stable versus half-year 2024, driven by healthcare pricing reforms and volume-based procurement initiatives in China. Excluding China, growth was 6%. Core Lab sales decreased by 2%, driven by China, while Molecular Lab sales increased by 3% due to strong growth in blood screening. The company is advancing its Diagnostics business with innovations like the AXELIOS sequencing solution, set to launch in 2026.

Valuation Metrics

Using the provided valuation metrics, Roche's P/E Ratio is 24.71, indicating a relatively high valuation. The P/S Ratio is 3.38, and the EV/EBITDA is 14.34. The Dividend Yield is 3.77%, and the Free Cash Flow Yield is 7.75%. The ROE is 27.27%, and the ROIC is 18.64%. These metrics suggest that Roche's strong financial performance is partially priced in, but the company's growth prospects and dividend yield may continue to attract investors.

Outlook and Guidance

Roche is updating its full-year LOE impact guidance to CHF 1 billion from CHF 1.2 billion. The company expects mid-single digit group sales growth and high single-digit core EPS growth for the full year. With a strong pipeline and new medicines, Roche is well-positioned for future growth. As Thomas Schinecker emphasized, "The company's portfolio balances risk, with assets like obesity treatments and TL1A considered relatively derisked."

3. NewsRoom

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Bio/Pharmaceutical Outsourcing Report, October 2025 - Pfizer and Roche Place $10 Billion Bets on Obesity and Liver Disease Therapies as Trump Tightens Grip on Drug Pricing and Manufacturing

Dec -04

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Orano Med Enters Next Phase of Collaboration with Roche

Dec -04

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OpenAI agrees to acquire AI startup Neptune to boost model training capabilities

Dec -04

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March Biosciences Designates Dr. Gurpreet Ratra as Chief Business Officer

Dec -03

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REGN & Tessera Collaborate to Develop Gene-Editing Therapy for AATD

Dec -02

Source: zacks.com

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Assessing Roche After Pipeline Wins and a 24% Rally in 2025

Dec -02

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Roche receives FDA clearance with CLIA waiver and CE Mark for its first point-of-care test for diagnosing Bordetella infections, including whooping cough (pertussis)

Dec -02

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The Top 5 Analyst Questions From Analog Devices’s Q3 Earnings Call

Dec -02

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.22%)

6. Segments

Pharmaceuticals - Roche Pharmaceuticals

Expected Growth: 4.0%

Roche Pharmaceuticals' 4.0% growth is driven by strong sales of its innovative medicines, particularly in cancer and immunology. Key products like Tecentriq and Perjeta have contributed significantly to revenue growth. Additionally, the company's robust pipeline and strategic acquisitions have enhanced its market position, enabling it to maintain a competitive edge in the pharmaceutical industry.

Pharmaceuticals - Chugai

Expected Growth: 4.0%

Chugai's growth is driven by strong sales of its flagship products, including olipop (constipation treatment) and Xofluza (influenza treatment). Roche Holding AG's strategic focus on innovative medicines and expansion into emerging markets also contribute to Chugai's 4.0% growth. Increasing demand for its portfolio of medicines, particularly in Asia, fuels the company's growth trajectory.

Diagnostics

Expected Growth: 3.5%

Roche Holding AG's diagnostics segment growth of 3.5% is driven by strong sales of its molecular diagnostic solutions, particularly COVID-19 testing products, and increased demand for its laboratory information systems, offset by declines in traditional diagnostic products.

Elimination

Expected Growth: 0.0%

The elimination from Roche Holding AG with 0.0% growth likely stems from declining sales or market share erosion due to increased competition, patent expirations, or unsuccessful product launches, ultimately affecting the company's revenue and growth prospects.

7. Detailed Products

Diagnostics

Roche Diagnostics is a global leader in in vitro diagnostics, offering a broad portfolio of diagnostic solutions for healthcare professionals.

Pharmaceuticals

Roche Pharmaceuticals develops and commercializes innovative medicines for oncology, immunology, ophthalmology, and neuroscience.

Sequencing Solutions

Roche Sequencing Solutions provides next-generation sequencing (NGS) and polymerase chain reaction (PCR) technologies for research and diagnostics.

Molecular Diagnostics

Roche Molecular Diagnostics offers a range of molecular diagnostic tests for infectious diseases, cancer, and genetic disorders.

Tissue Diagnostics

Roche Tissue Diagnostics provides instruments and reagents for tissue-based cancer diagnostics and research.

Point of Care

Roche Point of Care offers handheld and benchtop analyzers for near-patient testing in hospitals, clinics, and physician offices.

8. Roche Holding AG's Porter Forces

Forces Ranking

Threat Of Substitutes

Roche Holding AG has a moderate threat of substitutes due to the presence of alternative pharmaceutical companies and generic drug manufacturers. However, the company's strong brand reputation and patented products mitigate this threat to some extent.

Bargaining Power Of Customers

Roche Holding AG has a low bargaining power of customers due to its strong brand reputation and patented products, which gives the company significant pricing power. Additionally, the company's products are often reimbursed by healthcare systems, reducing the bargaining power of individual customers.

Bargaining Power Of Suppliers

Roche Holding AG has a moderate bargaining power of suppliers due to the presence of multiple suppliers for raw materials and services. However, the company's large scale of operations and long-term contracts with suppliers mitigate this threat to some extent.

Threat Of New Entrants

Roche Holding AG has a low threat of new entrants due to the high barriers to entry in the pharmaceutical industry, including significant research and development costs, regulatory hurdles, and the need for specialized expertise.

Intensity Of Rivalry

Roche Holding AG operates in a highly competitive pharmaceutical industry, with several large multinational corporations competing for market share. The company's strong brand reputation, patented products, and significant research and development investments help to mitigate this threat to some extent.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 50.16%
Debt Cost 3.95%
Equity Weight 49.84%
Equity Cost 4.72%
WACC 4.33%
Leverage 100.63%

11. Quality Control: Roche Holding AG passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Novartis

A-Score: 6.3/10

Value: 3.5

Growth: 4.2

Quality: 7.8

Yield: 7.5

Momentum: 5.5

Volatility: 9.3

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GSK

A-Score: 5.7/10

Value: 3.9

Growth: 2.2

Quality: 6.5

Yield: 6.9

Momentum: 7.5

Volatility: 7.3

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Sanofi

A-Score: 5.7/10

Value: 5.7

Growth: 4.0

Quality: 8.0

Yield: 7.5

Momentum: 1.5

Volatility: 7.3

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AstraZeneca

A-Score: 5.5/10

Value: 2.0

Growth: 7.6

Quality: 6.9

Yield: 3.1

Momentum: 6.5

Volatility: 7.0

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Roche

A-Score: 5.3/10

Value: 2.0

Growth: 3.0

Quality: 6.4

Yield: 6.2

Momentum: 6.0

Volatility: 8.0

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Bayer

A-Score: 4.5/10

Value: 8.1

Growth: 2.1

Quality: 2.5

Yield: 3.8

Momentum: 6.5

Volatility: 4.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

310.9$

Current Price

310.9$

Potential

-0.00%

Expected Cash-Flows