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Sandoz Group AG Registered Shares SDZ

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Stock XSWX Rating as of
CHF 32.55 +1.05 (3.33%)
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Company Report

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Sandoz Earnings: Generics Flat, but Results Look Good on Lofty Biosimilars From Hyrimoz, Omnitrope

Keonhee Kim

No-moat Sandoz reported first-quarter earnings that came largely as we expected. Total sales of $2.5 billion were up 4.5%, or 6% in constant currencies, as growth across all three regions and a strong biosimilars business made for a solid start to the year. After adjusting our model and baking in a more favorable USD/CHF exchange rate compared with last quarter, we slightly raised our fair value estimate to CHF 32 per share from CHF 31.

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Price vs Fair Value

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SDZ is trading at a 221% premium.
Price
CHF 32.55
Fair Value
CHF 99.00
Uncertainty
High
1-Star Price
CHF 35.90
5-Star Price
CHF 71.50
Economic Moat
Vvt
Capital Allocation
Fwsgbvzmx

Bulls Say, Bears Say

Bulls

With autonomy from its former parent, we think Sandoz can freely allocate resources to fit its best needs and grow the business.

Bears

Off-patent drugs face low- to mid-single digit price erosion year-over-year and headwinds could exacerbate as regulatory actions and other players in drug supply chain continue to exert their forces.

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Trading Information

Previous Close Price
CHF 31.50
Day Range
CHF 31.51–32.76
52-Week Range
CHF 22.70–32.76
Bid/Ask
CHF 0.00 / CHF 0.00
Market Cap
CHF 13.99 Bil
Volume/Avg
1.4 Mil / 1.5 Mil

Key Statistics

Price/Earnings (Normalized)
15.86
Price/Sales
1.51
Dividend Yield (Trailing)
1.38%
Dividend Yield (Forward)
1.38%
Total Yield
1.38%

Company Profile

Sandoz is one of the largest generic pharmaceutical manufacturers in the world, generating over $9 billion annually from off-patent drugs. Once part of Novartis, Sandoz spun off and went public in October 2023. Generics, including small molecules and complex injectables, make up roughly 75% of Sandoz’s total sales, and the firm has a significant presence in Europe, the United States, and other key international markets. Sandoz generates its remaining sales from biosimilars and is among leaders in the space. Sandoz launched Europe’s first biosimilar, Omnitrope, in 2006 as well as the first US biosimilar, Zarxio, in 2015. It currently has eight commercialized biosimilars in a number of markets and has over 20 assets in pipeline.
Sector
Healthcare
Industry
Drug Manufacturers - Specialty & Generic
Stock Style Box
Large Growth
Total Number of Employees
23,848
Website
https://www.sandoz.com

Competitors

Valuation

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Metric
SDZ
VTRS
TEVA
Price/Earnings (Normalized)
 15.863.825.96
Price/Book Value
 1.870.672.45
Price/Sales
 1.510.881.10
Price/Cash Flow
 14.744.0911.07
Price/Earnings
SDZ
VTRS
TEVA

Financial Strength

Metric
SDZ
VTRS
TEVA
Quick Ratio
 0.820.670.54
Current Ratio
 1.331.671.02
Interest Coverage
 1.491.350.39
Quick Ratio
SDZ
VTRS
TEVA

Profitability

Metric
SDZ
VTRS
TEVA
Return on Assets (Normalized)
 5.15%7.07%6.03%
Return on Equity (Normalized)
 10.96%16.57%35.36%
Return on Invested Capital (Normalized)
 9.49%9.85%12.54%
Return on Assets
SDZ
VTRS
TEVA
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