Lonza Group (SWX:LONN) - Share price, News & Analysis

LONN fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	3/6
Past Performance	2/6
Financial Health	6/6
Dividends	0/6

LONN Stock Overview

Lonza Group Ltd supplies products and services to the pharmaceutical, biotech, and nutrition markets in Switzerland and internationally.

Rewards

Trading at 57.3% below our estimate of its fair value

Earnings are forecast to grow 18.61% per year

Risk Analysis

No risks detected for LONN from our risk checks.

Lonza Group Competitors

Pfizer

NYSE:PFE

US$299.7b

Thermo Fisher Scientific

NYSE:TMO

US$214.8b

Novartis

SWX:NOVN

CHF190.4b

Danaher

NYSE:DHR

US$180.4b

Price History & Performance

Summary of all time highs, changes and price drops for Lonza Group
Historical stock prices
Current Share Price	CHF555.00
52 Week High	CHF785.40
52 Week Low	CHF510.60
Beta	0.59
1 Month Change	-10.46%
3 Month Change	-8.63%
1 Year Change	-3.48%
3 Year Change	75.97%
5 Year Change	173.00%
Change since IPO	504.58%

Shareholder Returns

	LONN	CH Life Sciences	CH Market
7D	0.4%	-0.06%	-2.5%
1Y	-3.5%	-9.7%	-2.1%

Return vs Industry: LONN exceeded the Swiss Life Sciences industry which returned -9.3% over the past year.

Return vs Market: LONN underperformed the Swiss Market which returned -1.9% over the past year.

Price Volatility

Is LONN's price volatile compared to industry and market?
LONN volatility
LONN Average Weekly Movement	4.5%
Life Sciences Industry Average Movement	7.1%
Market Average Movement	4.9%
10% most volatile stocks in CH Market	8.5%
10% least volatile stocks in CH Market	2.5%

Stable Share Price: LONN is not significantly more volatile than the rest of Swiss stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: LONN's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1897	16,218	Pierre-Alain Ruffieux	https://www.lonza.com

Lonza Group Ltd supplies products and services to the pharmaceutical, biotech, and nutrition markets in Switzerland and internationally. It operates through Biologics, Small Molecules, Cell and Gene, and Capsules and Health Ingredients divisions. The Biologics division engages in the contract development and manufacturing services for biopharmaceuticals.

Lonza Group Fundamentals Summary

How do Lonza Group's earnings and revenue compare to its market cap?
LONN fundamental statistics
Market Cap	CHF41.17b
Earnings (TTM)	CHF674.00m
Revenue (TTM)	CHF5.41b

61.1x

P/E Ratio

7.6x

P/S Ratio

Is LONN overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
LONN income statement (TTM)
Revenue	CHF5.41b
Cost of Revenue	CHF3.30b
Gross Profit	CHF2.11b
Other Expenses	CHF1.44b
Earnings	CHF674.00m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

Jul 22, 2022

Earnings per share (EPS)	9.08
Gross Margin	39.01%
Net Profit Margin	12.46%
Debt/Equity Ratio	24.6%

How did LONN perform over the long term?

See historical performance and comparison

Dividends

0.5%

Current Dividend Yield

33%

Payout Ratio

Valuation

Is Lonza Group undervalued compared to its fair value and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

>50%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: LONN (CHF555) is trading below our estimate of fair value (CHF1300.49)

Significantly Below Fair Value: LONN is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: LONN is poor value based on its Price-To-Earnings Ratio (61.1x) compared to the Swiss Life Sciences industry average (45.7x).

PE vs Market: LONN is poor value based on its Price-To-Earnings Ratio (61.1x) compared to the Swiss market (17.9x).

Price to Earnings Growth Ratio

PEG Ratio: LONN is poor value based on its PEG Ratio (3.3x)

Price to Book Ratio

PB vs Industry: LONN's Price-To-Book Ratio (4.2x) is in line with the CH Life Sciences industry average.

Future Growth

How is Lonza Group forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

18.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: LONN's forecast earnings growth (18.6% per year) is above the savings rate (-0.3%).

Earnings vs Market: LONN's earnings (18.6% per year) are forecast to grow faster than the Swiss market (5.9% per year).

High Growth Earnings: LONN's earnings are forecast to grow, but not significantly.

Revenue vs Market: LONN's revenue (11.2% per year) is forecast to grow faster than the Swiss market (4.3% per year).

High Growth Revenue: LONN's revenue (11.2% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: LONN's Return on Equity is forecast to be low in 3 years time (12.2%).

Past Performance

How has Lonza Group performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

7.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: LONN has high quality earnings.

Growing Profit Margin: LONN's current net profit margins (12.5%) are lower than last year (16.2%).

Past Earnings Growth Analysis

Earnings Trend: LONN's earnings have grown by 7.3% per year over the past 5 years.

Accelerating Growth: LONN's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: LONN had negative earnings growth (-7.7%) over the past year, making it difficult to compare to the Life Sciences industry average (50.8%).

Return on Equity

High ROE: LONN's Return on Equity (6.9%) is considered low.

Financial Health

How is Lonza Group's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: LONN's short term assets (CHF6.0B) exceed its short term liabilities (CHF2.4B).

Long Term Liabilities: LONN's short term assets (CHF6.0B) exceed its long term liabilities (CHF4.3B).

Debt to Equity History and Analysis

Debt Level: LONN has more cash than its total debt.

Reducing Debt: LONN's debt to equity ratio has reduced from 79.9% to 24.6% over the past 5 years.

Debt Coverage: LONN's debt is well covered by operating cash flow (50.4%).

Interest Coverage: LONN's interest payments on its debt are well covered by EBIT (10.8x coverage).

Balance Sheet

Dividend

What is Lonza Group current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

0.54%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: LONN's dividend (0.54%) isn’t notable compared to the bottom 25% of dividend payers in the Swiss market (1.91%).

High Dividend: LONN's dividend (0.54%) is low compared to the top 25% of dividend payers in the Swiss market (3.88%).

Stability and Growth of Payments

Stable Dividend: LONN is not paying a notable dividend for the Swiss market, therefore no need to check if payments are stable.

Growing Dividend: LONN is not paying a notable dividend for the Swiss market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: LONN is not paying a notable dividend for the Swiss market.

Cash Payout to Shareholders

Cash Flow Coverage: LONN is paying a dividend but the company has no free cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

1.5yrs

Average management tenure

CEO

Pierre-Alain Ruffieux (52 yo)

1.5yrs

Tenure

CHF3,990,000

Compensation

Dr. Pierre-Alain Ruffieux, PhD has been the Chief Executive Officer at Lonza Group Ltd since November 1, 2020. Dr. Ruffieux served as Head of Global Pharma Technical Operations at Roche where he and his te...

CEO Compensation Analysis

Compensation vs Market: Pierre-Alain's total compensation ($USD4.16M) is about average for companies of similar size in the Swiss market ($USD4.89M).

Compensation vs Earnings: Pierre-Alain's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: LONN's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.

Board Members

Experienced Board: LONN's board of directors are considered experienced (5.6 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/24 00:00
End of Day Share Price	2022/05/24 00:00
Earnings	2021/12/31
Annual Earnings	2021/12/31