Evaluating Roche After Shipments Resume for Key Duchenne Muscular Dystrophy Therapy

If you’re staring at Roche Holding’s ticker and wondering what to do next, you’re in good company. Over the past week, the stock has nudged up 2.6%, and it is up 3.4% for the year to date, even after a stretch of underwhelming long-term returns. It has been a bit of a wild ride, with shares down 5.3% over the last three years, hinting at shifting market sentiment and possibly some uncertainty around the broader pharmaceutical sector.

Roche’s recent price moves have not happened in a vacuum. There has been plenty of headline-making news, including potential new U.S. pharma tariffs on the horizon, Swiss government officials meeting with industry leaders like Roche to discuss policy, and a resumption of international shipments for key therapies following regulatory changes. All of this has stirred the pot and affected how investors think about risks and opportunities here.

But at the end of the day, you are probably most interested in whether Roche looks undervalued compared to where it is trading now. The company scores a 4 out of 6 on our valuation checklist, which means it passes two-thirds of the key tests we use to spot bargains. Up next, I will break down those six valuation checks, highlight the ones where Roche really shines, and introduce a more holistic way to assess whether this stock deserves a place in your portfolio.

Why Roche Holding is lagging behind its peers

Approach 1: Roche Holding Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates what a company is worth by projecting its future cash flows and discounting them back to their present value. For Roche Holding, this involves evaluating how much money the business is expected to generate over the next decade and beyond, then determining what that future cash pile is really worth today in CHF.

Currently, Roche is generating Free Cash Flow (FCF) of approximately CHF 14.1 billion, with analysts forecasting this figure to rise steadily. By 2029, FCF is projected to reach nearly CHF 20.5 billion, and further extrapolations by Simply Wall St extend these estimates out to CHF 23.9 billion by 2035. These numbers highlight consistent annual growth in free cash generation, indicating a robust operational outlook.

Based on the DCF approach using a 2 Stage Free Cash Flow to Equity model, Roche's estimated intrinsic value is CHF 776.48 per share. With the stock trading at a discount of 65.8% to this calculated fair value, the current share price appears to be significantly below its intrinsic worth.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Roche Holding.

Our Discounted Cash Flow (DCF) analysis suggests Roche Holding is undervalued by 65.8%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Roche Holding Price vs Earnings

The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics for profitable companies like Roche Holding, since it directly connects a company's share price to its earnings power. A stock's PE ratio offers a quick snapshot of how much investors are willing to pay for each franc of current earnings, making it a useful tool for comparing companies with positive profits across the same sector.

What counts as a "normal" or "fair" PE ratio depends greatly on the company's expected growth, its risk profile, and broader industry trends. Fast-growing, lower-risk companies tend to command higher PE ratios, while mature or riskier firms often trade at lower multiples. For Roche, the current PE ratio stands at 23.92x. Compared to the Pharmaceuticals industry average of 25x and a peer group average of 70.45x, Roche is trading at a much more measured valuation than many of its competitors.

Simply Wall St’s Fair Ratio for Roche is 36.94x. This proprietary metric factors in not only the company’s earnings growth potential and risk, but also its profit margins, industry dynamics, and the size of its market capitalization. Unlike a simple industry comparison, the Fair Ratio provides a more tailored benchmark that helps you see if Roche’s unique strengths or challenges justify a higher or lower valuation multiple.

With Roche’s current PE ratio (23.92x) well below its Fair Ratio (36.94x), the evidence points to an undervalued stock based on this perspective.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Roche Holding Narrative

Earlier, we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is simply your personal story or perspective on a company. It connects the facts and figures (like fair value, revenue growth, and future margins) to the reasons behind your assumptions and what you believe will happen next for the business.

Instead of just looking at numbers, Narratives let you lay out your reasoning: why you think Roche will outperform, what catalysts or risks matter most, and how these insights flow through to a financial forecast and fair value. This approach gives investing context, turning data into meaning, and is now easy to put into action with the Narratives feature on Simply Wall St’s Community page, where millions of investors share and refine their views.

Narratives help you decide when to buy or sell by explicitly linking your fair value estimate to the current price, making your investment logic visible and actionable. They update automatically as new information arrives, whether it is earnings news or sector shifts, so your story and strategy stay current.

For example, some investors might see Roche's fair value as low as CHF230, reflecting cautious expectations about growth and competition, while others put it as high as CHF438, based on strong pipeline optimism and margin expansion. Your Narrative reflects your unique outlook and helps guide your next move.

Do you think there's more to the story for Roche Holding? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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