Roche – Downgrade to HOLD (PT CHF300, 16pgs)
We downgrade Roche to Hold due to the risk of higher than expected biosimilar erosion, Kadcyla downgrades due to Enhertu competition and a headwind from Diagnostics in 2022 meaning growth next year is also likely to be slow. Moreover, for Roche to outperform it would require positive Huntington’s data this year, in our view. This would undoubtedly be a ‘game changer’ and make us reassess our view but absent that, we see a number of risks to earnings that make it difficult to see how Roche outperforms our favoured names (AZN/NOVO/ SAN). PT cut to CHF300, implying Roche trades on a small sector premium in 2022. Also, see our NOVN d/grade today.For access to the full note, please contact Naresh Chouhan ( )
Roche Holding is a healthcare company. Co. operates in two Divisions, Pharmaceuticals and Diagnostics. Co.'s pharmaceuticals division is comprised of two business segments Roche Pharmaceuticals and Chugai. Co.'s pharmaceuticals division provides therapies including Cotellic, in combination with Zelboraf for advanced melanoma, and Alecensa for a specific type of lung cancer. Co.'s diagnostics division consists of four business areas: Diabetes Care, Molecular Diagnostics, Professional Diagnostics and Tissue Diagnostics. Co.'s diagnostics division provides in vitro diagnostic tests, used by healthcare providers to screen, diagnose and monitor therapies.
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