Lonza: Revised Mid-Term Outlook Due to Lower COVID-19 Demand; Shares Attractive for Long-Term Investors

We have adjusted our mid-term forecasts to account for reduced COVID-19-related revenue due to lower post-pandemic demand, as Moderna canceled its contract with Lonza to produce its mRNA COVID-19 vaccine. As a result, we have lowered our fair value estimate to CHF 530 per share. However, we maintain our positive long-term outlook for Lonza thanks to strong demand for manufacturing biologics and cell and gene therapies. We view the stock as trading at an attractive entry point in 5-star territory about 33% below our fair value estimate.