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1. Company Snapshot

1.a. Company Description

Galenica AG operates as a healthcare service provider in Switzerland and internationally.It operates through two segments, Products & Care, and Logistics & IT.The Products & Care segment operates 520 pharmacies, including 368 owned pharmacies and 152 partner pharmacies under the Amavita, Sun Store, and Coop Vitality brands.


This segment also offers medication for treatment of patients at home; launches and distributes a portfolio of consumer health, pharmaceutical, and parapharmaceutical products; and marketing and sale services to partners in the healthcare market.The Logistics & IT segment provides range of specialized pre-wholesale services, including storage, distribution, and debt collection to pharmaceutical and healthcare companies.This segment also offers logistics and IT services, and master data system for the healthcare market; develops management solutions for the healthcare market; and publishes printed and electronic technical information on pharmaceutical products, as well as complete management solutions for pharmacies.


The company was founded in 1927 and is headquartered in Bern, Switzerland.

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1.b. Last Insights on GALE

Galenica AG's recent performance has been driven by a significant undervaluation, with its estimated fair value standing at CHF148, representing a 41% premium to its current market price. This discrepancy suggests that investors may be overlooking the company's intrinsic value. Furthermore, Galenica's robust free cash flow generation, estimated at CHF148, underscores its financial resilience. Additionally, the company's commitment to returning value to shareholders through share buybacks has been a notable positive factor.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Institutions own 45% of Galenica AG (VTX:GALE) shares but retail investors control 55% of the company

Oct -06

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Galenica AG's (VTX:GALE) Stock Has Shown A Decent Performance: Have Financials A Role To Play?

Sep -09

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Are Investors Undervaluing Galenica AG (VTX:GALE) By 41%?

Jul -24

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Galenica Ltd (XSWX:GALE) Full Year 2024 Earnings Call Highlights: Strategic Investments and ...

Mar -12

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Compagnie Financière Tradition (VTX:CFT) shareholders have earned a 9.6% CAGR over the last five years

Jan -19

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.91%)

6. Segments

Logistics and Information Technology Services

Expected Growth: 3.5%

Galenica AG's Logistics and Information Technology Services segment growth of 3.5% is driven by increasing demand for efficient supply chain management, rising adoption of digital healthcare solutions, and strategic partnerships with pharmaceutical companies. Additionally, investments in data analytics and artificial intelligence are enhancing operational efficiency and customer experience.

Products and Care

Expected Growth: 4.5%

Galenica AG's Products and Care segment growth of 4.5% is driven by increasing demand for pharmaceutical products, expansion into new markets, and strategic partnerships. Additionally, investments in digitalization and e-commerce platforms have improved customer experience, leading to higher sales. Furthermore, the company's focus on innovative and specialty products has contributed to revenue growth.

Group Services

Expected Growth: 3.8%

Galenica AG's Group Services segment growth of 3.8% is driven by increasing demand for healthcare services, expansion of its pharmacy network, and strategic partnerships. Additionally, investments in digitalization and e-health solutions have improved operational efficiency and enhanced customer experience, contributing to the segment's growth.

7. Detailed Products

Pharmaceutical Specialties

Galenica AG offers a range of pharmaceutical specialties, including prescription and over-the-counter medications, as well as medical devices and diagnostics.

Generics

Galenica AG provides a portfolio of generic medications, offering affordable and high-quality alternatives to branded products.

Oncology Products

Galenica AG offers a range of oncology products, including chemotherapy medications and supportive care treatments.

Biosimilars

Galenica AG provides biosimilar products, offering cost-effective and high-quality alternatives to original biologics.

Healthcare Services

Galenica AG offers a range of healthcare services, including pharmacy services, medical diagnostics, and healthcare consulting.

Consumer Healthcare Products

Galenica AG provides a range of consumer healthcare products, including over-the-counter medications, vitamins, and nutritional supplements.

8. Galenica AG's Porter Forces

Forces Ranking

Threat Of Substitutes

Galenica AG operates in a highly competitive market, and there are several substitutes available to customers. However, the company's strong brand presence and customer loyalty mitigate the threat of substitutes to some extent.

Bargaining Power Of Customers

Galenica AG's customers have significant bargaining power due to the availability of substitutes and the company's dependence on a few large customers. This gives customers the ability to negotiate prices and terms.

Bargaining Power Of Suppliers

Galenica AG has a diverse supplier base, which reduces the bargaining power of individual suppliers. The company's scale and purchasing power also give it an advantage in negotiations with suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the pharmaceutical industry, including significant regulatory hurdles and the need for substantial investment in research and development.

Intensity Of Rivalry

The pharmaceutical industry is highly competitive, with many established players competing for market share. Galenica AG faces intense competition from both domestic and international companies.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 28.60%
Debt Cost 3.95%
Equity Weight 71.40%
Equity Cost 4.90%
WACC 4.63%
Leverage 40.05%

11. Quality Control: Galenica 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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Galenica

A-Score: 6.0/10

Value: 4.0

Growth: 4.0

Quality: 4.9

Yield: 5.6

Momentum: 7.5

Volatility: 10.0

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Quality: 8.6

Yield: 5.0

Momentum: 4.0

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A-Score: 5.5/10

Value: 5.0

Growth: 6.0

Quality: 7.7

Yield: 1.2

Momentum: 6.0

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Hikma Pharmaceuticals

A-Score: 5.3/10

Value: 4.9

Growth: 4.4

Quality: 6.1

Yield: 5.0

Momentum: 3.0

Volatility: 8.3

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Qiagen

A-Score: 5.1/10

Value: 2.5

Growth: 4.4

Quality: 7.2

Yield: 3.8

Momentum: 3.5

Volatility: 9.3

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Rovi

A-Score: 4.5/10

Value: 1.8

Growth: 7.7

Quality: 8.0

Yield: 2.5

Momentum: 1.0

Volatility: 6.3

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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

91.85$

Current Price

91.85$

Potential

-0.00%

Expected Cash-Flows