Broadcom named strategic vendor for Walmart virtualization solutions
Wednesday, CFRA analysts increased the price target on Lonza Group (LONN:SW) (OTC: LZAGY) to CHF660 from the previous CHF610, while maintaining a "Buy" rating on the stock. The revised price target reflects an enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) ratio of 22 times CFRA’s 2025 EBITDA forecast, which aligns with Lonza’s five-year average. According to InvestingPro data, Lonza currently trades at an EV/EBITDA multiple of 24.3x, with the stock near its 52-week high of $67.
The adjustment comes after Lonza reported 2024 sales of CHF6.6 billion, marking a 2% year-over-year decrease, which was slightly below CFRA’s expectations. However, Lonza’s core EBITDA margin for 2024 stood at 29.0%, a decline of 0.8 percentage points from the previous year, but still exceeded both CFRA and S&P Capital IQ consensus estimates of approximately 28%. The contraction in sales and margin was anticipated due to the termination of a contract with Moderna (NASDAQ:MRNA).
Despite the impact of the contract termination, Lonza’s underlying sales witnessed a 7% growth, driven by a robust performance in its contract development and manufacturing organization (CDMO) business, especially within the Biologics division. The Capsules & Health Ingredients (CHI) segment, however, experienced soft demand.
CFRA anticipates a post-2024 recovery for Lonza, supported by growth in new assets and the company’s strong market position. The analysts have retained their 2025 earnings per share (EPS) estimate of CHF16.00 and introduced a 2026 EPS forecast of CHF19.30. These estimates are consistent with Lonza’s unchanged 2025 guidance, as provided during the 2024 Capital Market Day in December 2024.
In other recent news, Lonza Group AG has been the subject of several noteworthy developments. KeyBanc Capital Markets maintained a positive outlook on Lonza, reiterating an Overweight rating and citing the company’s potential for high growth by 2025. The company also anticipates low-teens organic growth on its core business, aligning with its long-term targets. Furthermore, Lonza has decided to divest its Capsules & Health Ingredients (CHI) business, marking a significant step in its evolution.
In terms of financials, Lonza reported a 1.8% sales increase to CHF 3.1 billion in its H1 2024 earnings call, along with a core EBITDA margin of 29.2%. Analyst firms Goldman Sachs and RBC Capital have also updated their stances on Lonza shares, with Goldman Sachs initiating coverage with a buy rating, and RBC Capital raising its target for Lonza shares.
Lastly, CLSA raised its price target for Lonza shares from CHF702 to CHF723, maintaining its Outperform rating, based on the company’s strong growth outlook. These developments highlight the recent progress and potential of Lonza Group AG.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.