After accumulation, acceleration. Timing appears favorable to go long in shares of Lonza Group AG and to anticipate an exit of the trading range on the upside.
Summary
● From a short-term investment perspective, the company presents a deteriorated fundamental situation
● The company has a good ESG score relative to its sector, according to MSCI.
Strengths
● The company's profit outlook over the next few years is a strong asset.
● Before interest, taxes, depreciation and amortization, the company's margins are particularly high.
● The group's high margin levels account for strong profits.
● Analysts covering this company mostly recommend stock overweighting or purchase.
Weaknesses
● The company's valuation in terms of earnings multiples is rather high. Indeed, the firm is getting paid 40.1 times its estimated earnings per share for the ongoing year.
● The company's "enterprise value to sales" ratio is among the highest in the world.
● The company appears highly valued given the size of its balance sheet.
● The company is not the most generous with respect to shareholders' compensation.
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Lonza Group AG is one of the world leaders of the contract development and manufacturing of pharmaceutical and biotechnology products. Net sales break down by family of products and services as follows:
- biologics and bio-pharmaceuticals (55.9%): microbiological fermentation products, mammalian cell-based bio-pharmaceuticals, monoclonal antibodies, therapeutic proteins, etc.;
- synthesis products (24.7%): chemopharmaceutical products, bioconjugates, small molecules, active pharmaceutical ingredients, complex intermediates, etc.;
- specialised therapeutic products (15.8%): cell and gene therapies, synthetic therapeutic nucleic acids, oligonucleotides, microbial biological products, etc.;
- others (3.6%).
This super rating is the result of a weighted average of the rankings based on the following ratings: Valuation (Composite), EPS Revisions (4 months), and Visibility (Composite). We recommend that you carefully review the associated descriptions.
Investor
Investor
This super composite rating is the result of a weighted average of the rankings based on the following ratings: Fundamentals (Composite), Valuation (Composite), EPS Revisions (1 year), and Visibility (Composite). We recommend that you carefully review the associated descriptions.
Global
Global
This composite rating is the result of an average of the rankings based on the following ratings: Fundamentals (Composite), Valuation (Composite), Financial Estimates Revisions (Composite), Consensus (Composite) and Visibility (Composite). The company must be covered by at least 4 of these 5 ratings for the calculation to be carried out. We recommend that you carefully review the associated descriptions.
Quality
Quality
This composite rating is the result of an average of rankings based on the following ratings: Returns (Composite), Profitability (Composite) and Quality of Financial Reporting (Composite), and Financial Health (Composite). The company must be covered by at least 2 of these 3 ratings for the calculation to be performed. We recommend that you carefully read the associated descriptions.
ESG MSCI
ESG MSCI
The MSCI ESG score assesses a company’s environmental, social, and governance practices relative to its industry peers. Companies are rated from CCC (laggard) to AAA (leader). This rating helps investors incorporate sustainability risks and opportunities into their investment decisions.
