January 23, 2025
Top 10 Stock Roche Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Roche – Top 10 Stock in Swiss Market Index SMI
Roche is listed as a top 10 stock on January 23, 2025 in the market index SMI because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 26 (26% performer), Obermatt assesses an overall hold recommendation for Roche on January 23, 2025.
Snapshot: Obermatt Ranks
| Country | Switzerland |
| Industry | Pharmaceuticals |
| Index | Dividends Europe, Employee Focus EU, Diversity Europe, Human Rights, Moonshot Tech, Recycling, SPI, SMI |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Roche Hold
| 360 METRICS | January 23, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 53 |
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| GROWTH | ||||||||
| GROWTH | 34 |
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| SAFETY | ||||||||
| SAFETY | 26 |
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| SENTIMENT | ||||||||
| SENTIMENT | 60 |
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| 360° VIEW | ||||||||
| 360° VIEW | 26 |
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ANALYSIS: With an Obermatt 360° View of 26 (better than 26% compared with alternatives), overall professional sentiment and financial characteristics for the stock Roche are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Roche. The consolidated Value Rank has an attractive rank of 53, which means that the share price of Roche is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 53% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 60, which means that professional investors are more optimistic about the stock than for 60% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 34, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 26, meaning the company has a riskier financing structure than 74 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 26, Roche is worse than 74% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 53) and positive market sentiment in the professional investor community (Sentiment Rank of 60), but growth expectations are below-average (Growth Rank of 34) and the financing structure is on the risky side(Safety Rank of 26). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of Roche is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for Roche positive
ANALYSIS: With an Obermatt Sentiment Rank of 60 (better than 60% compared with alternatives), overall professional sentiment and engagement for the stock Roche is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Roche. Analyst Opinions are at a rank of 22 (worse than 78% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 66, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Roche. Even better, the Professional Investors rank is 70, meaning that professional investors hold more stock in this company than in 70% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 62, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 62% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 60 (more positive than 60% compared with investment alternatives), Roche has a reputation among professional investors that is above-average compared with that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: Roche Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 53 (better than 53% compared with alternatives), Roche shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Roche. Price-to-Profit (also referred to as price-earnings, P/E) is 55 which means that the stock price compared with what market professionals expect for future profits is lower than for 55% of comparable companies, indicating a good value concerning Roche's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 10, which means that the stock price is lower as regards to invested capital than for 10% of comparable investments. On the other hand, Price-to-Sales is less favorable than 64% of alternatives (only 36% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 12% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 53, is a buy recommendation based on Roche's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: Roche Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 34 (better than 34% compared with alternatives), Roche shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Roche. Sales Growth has a rank of 55 which means that currently professionals expect the company to grow more than 55% of its competitors. Stock Returns are also above average with a rank of 59. But Capital Growth has only a rank of 30, which means that currently professionals expect the company to grow its invested capital less than 70% of its competitors. Profit Growth is also low, with a rank of only 32, which means that, currently, professionals expect the company to grow its profits below average. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 34, is a hold recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 59% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. ...read more
Safety Strategy: Roche Debt Financing Safety below-average
| SAFETY METRICS | January 23, 2025 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 17 |
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| REFINANCING | ||||||||
| REFINANCING | 25 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 73 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 26 |
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ANALYSIS: With an Obermatt Safety Rank of 26 (better than 26% compared with alternatives), the company Roche has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Roche is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Roche. Liquidity is at 73, meaning the company generates more profit to service its debt than 73% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 25, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 75% of its competitors. Leverage is also high at a rank of 17, which means that the company has an above-average debt-to-equity ratio. It has more debt than 83% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 26 (worse than 74% compared with alternatives), Roche has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Roche Lowest Financial Performance
| COMBINED PERFORMANCE | January 23, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 53 |
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| GROWTH | ||||||||
| GROWTH | 34 |
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| SAFETY | ||||||||
| SAFETY | 73 |
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| COMBINED | ||||||||
| COMBINED | 22 |
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ANALYSIS: With an Obermatt Combined Rank of 22 (worse than 78% compared with investment alternatives), Roche (Pharmaceuticals, Switzerland) shares have lower financial characteristics compared with similar stocks. Shares of Roche are a good value (attractively priced) with a consolidated Value Rank of 53 (better than 53% of alternatives) but show below-average growth (Growth Rank of 34), and are riskily financed (Safety Rank of 26), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 22, is a sell recommendation based on Roche's financial characteristics. As the company Roche's key financial metrics exhibit good value (Obermatt Value Rank of 53) but low growth (Obermatt Growth Rank of 34) and risky financing practices (Obermatt Safety Rank of 26), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 53% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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