Is Roche Still Attractive After Its 34% Surge And Pipeline Optimism In 2025

• Wondering if Roche Holding is still a smart buy after its strong run, or if the upside is already priced in? This breakdown is designed to give you a clear, valuation-driven view.
• The stock has climbed 0.5% over the last week, 4.2% over the past month, and is now up 24.5% year to date and 33.8% over the last year. This naturally raises the question of whether the current price fully reflects its prospects.
• Recent gains have come as investors refocus on Roche's late-stage pipeline, strategic collaboration deals and ongoing work in oncology and immunology. This has reinforced the narrative that it remains a cornerstone of global healthcare innovation. At the same time, shifting sentiment around defensives and big pharma has pulled more capital into names like Roche as markets reassess where to find resilient growth and stable cash flows.
• Despite that strength, Roche currently scores a 4 out of 6 on our valuation checks. This suggests it screens as undervalued on most, but not all, metrics. We will walk through those methods next and will also highlight a more holistic way to think about valuation at the end of the article.

Roche Holding delivered 33.8% returns over the last year. See how this stacks up to the rest of the Pharmaceuticals industry.

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

The Discounted Cash Flow model estimates what a business is worth today by projecting the cash it can generate in the future and discounting those cash flows back into today’s money.

For Roche Holding, the latest twelve month free cash flow is about CHF 14.1 billion. Analysts expect this to rise steadily, with projections moving into the CHF 16 to 19 billion range over the next several years, and Simply Wall St extrapolations taking it into the low CHF 20 billion range by around 2035 as growth moderates.

When all those future cash flows are added up and discounted back, the DCF model arrives at an intrinsic value of roughly CHF 742 per share. Compared with the current market price, that implies the shares trade at about a 57.0% discount to their estimated fair value, indicating the market is still pricing Roche cautiously despite its cash generation and pipeline.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Roche Holding is undervalued by 57.0%. Track this in your watchlist or portfolio, or discover 916 more undervalued stocks based on cash flows.

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

Approach 2: Roche Holding Price vs Earnings

For a profitable and relatively mature business like Roche, the price to earnings ratio is a useful way to gauge how much investors are willing to pay today for each unit of current earnings. It naturally reflects the market’s view on future growth, quality and risk, since faster growing or lower risk companies usually justify higher PE ratios, while cyclical or riskier names tend to trade on lower multiples.

Roche currently trades on a PE of about 28.8x, which is above the broader Pharmaceuticals industry average of roughly 22.3x but well below the 81.3x average of its closest peers. To move beyond simple comparisons, Simply Wall St uses a Fair Ratio, which is a proprietary estimate of the PE multiple Roche might trade on given its earnings growth outlook, industry, profit margins, market value and risk profile. This Fair Ratio for Roche is around 36.7x, which suggests the market is assigning a discount relative to what those fundamentals might warrant and that the stock appears undervalued on a PE basis.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Roche Holding Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, an easy tool on Simply Wall St’s Community page that lets millions of investors turn their view of a company into a simple story that links assumptions about future revenue, earnings and margins to a financial forecast and then to a fair value. This can help you decide whether to buy or sell by comparing that fair value to today’s price, while automatically updating as new news or earnings arrive. For example, one Roche Narrative might assume stronger growth, higher margins and a fair value closer to CHF 438 per share, while a more cautious Narrative could bake in slower growth, lower profitability and a fair value near CHF 230. This clearly shows how different perspectives on the same business can lead to different, but transparent, investment decisions.

For Roche Holding however, we will make it really easy for you with previews of two leading Roche Holding Narratives:

🐂 Roche Holding Bull Case

Fair value: CHF 323.28

Implied undervaluation vs last close: approximately 1.2%

Forecast revenue growth: 1.53%

• Analysts see Roche's innovation in diagnostics, high value biologics and expansion in emerging markets supporting steady top line growth and more diversified, resilient revenues.
• Margin expansion is expected as automation, AI and efficiency programs free up billions in cost savings for reinvestment, which could lift profits and earnings growth over time.
• Key risks include China pricing pressure, looming patent expiries, late stage trial setbacks and persistent global reimbursement pressure, which could all weigh on growth and profitability if they intensify.

🐻 Roche Holding Bear Case

Fair value: CHF 302.06

Implied overvaluation vs last close: approximately 5.8%

Forecast revenue growth: 5.07%

• Roche delivered 7% revenue growth in 2024 and a 12% rise in core EPS, but large writedowns on prior acquisitions and weakness in diagnostics highlight execution challenges.
• The investment case leans on a strong late stage pipeline and a solid long term growth outlook, yet relies on successful Phase III readouts and margin recovery in diagnostics to justify potential upside.
• Risks include further R&D failures, competitive pressure in key therapeutic areas and lingering concerns about capital allocation, leading some investors to see the current share price as ahead of fundamentals.

Do you think there's more to the story for Roche Holding? Head over to our Community to see what others are saying!

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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