Roche - D/G to SELL – EPS Risks in 2024 (SELL, TP CHF200 [300], 17 pgs)
We forecast just 2% EPS growth in 2024 vs consensus at 8% due to a number of factors: 1) Slowing growth from Tecentriq, Hemlibra & Ocrevus due to competition & Tecentriq nearing maturity, 2) Downside risk to consensus in the Royalties line, 3) A CHF700m earnings headwind due to higher tax & debt costs. We forecast 2% growth in S&D and R&D which could be lower, but with likely upward inflationary pressure on wage costs, we believe it will be difficult to materially reduce costs. We now forecast just 3.6% CAGR EPS growth 2023-28 and believe there is a de-rating risk for Roche as well as EPS risk. We cut our PT to 11x 2024 EPS & cut our rating to SELL.For access to the full note, please contact Naresh Chouhan ( )
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