Lonza Group (LONN.S): Updated consensus comparison ahead of 1H26 earnings

研报英文原文证据摘录

Lonza Group (LONN.S): Updated consensus comparison ahead of 1H26 earnings

Goldman Sachs Lonza Group (LONN.S)

Valuation and Risks

We are Buy rated on Lonza. Our 12-month price target of CHF 665 is derived from a

50:50 blend of DCF and EV/EBITDA valuation methods. Our bottom-up DCF analysis

suggests a valuation of CHF 665/share based on a WACC of 7.5% and a TGR of 3.5%. On

a multiples basis, we use EV/EBITDA multiples for key peers for each division to derive an

SOTP valuation. We believe its Integrated Biologics division should be valued on 17x

2027E EBITDA, its Specialised Modalities division 17x 2027E EBITDA, its Advanced

Synthesis division 16x 2027E EBITDA, and its Capsules & Health Ingredients division 9x

2027E EBITDA, with the Corporate division EBITDA based on the weighted average of

the operational divisions, resulting in an EV/EBITDA-based SOTP valuation of CHF

666/share.

Key downside risks to our view and price target include:

n Lack of EBITDA margin progression: if capacity utilization in new investments for the

underlying business does not ramp as fast as we expect, this could drive downside to

EBITDA estimates, potentially reducing our earnings upside potential.

n Capacity utilisation being slower than expected at Vacaville: if non-Roche contracts do

not ramp up to replace Roche contracts that are expected to decline, this could

impact both revenue and EBITDA estimates, reducing earnings upside potential.

n Further delays in improvements in the biotech funding environment: this could continue

to weigh on early-stage development in biologics and prevent any recovery in

growth in the Cell & Gene therapy business, which is in early stages and can be

volatile.

n Long-term risks associated with single-use continuous manufacturing: if the industry