Trade the Lonza share!
LONZA

Analysis before buying or selling Lonza shares

Trade the Lonza share!
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Do you want to take position on the Lonza share price online or simply buy this stock in order to add it to your stock portfolio? In this case, you must make sure that you have all the necessary elements to implement your analyses of this stock. We offer our help in this complex task by providing you with a summary of all the data you will need. We'll be taking a look at the fundamental analysis of the company, its main and secondary activities, its main direct competitors and even its most recent strategic allies.

Elements to consider before selling or buying Lonza shares

Analysis N°1

First of all, attention should be paid to the research and development activities of the Lonza company with the aim of creating and bringing new products to the market and meet more of the needs of its customers.

Analysis N°2

The increasingly stringent regulations regarding the environmental impact of chemicals and their use in everyday products also need to be closely monitored for their possible impact on Lonza's activities.

Analysis N°3

You can also take an interest in the operations set up by Lonza aimed at supporting its growth with merger or acquisition strategies and the implementation of large-scale partnerships in research or commercialization.

Analysis N°4

Finally, we suggest you follow all the official communications of the group concerning its growth strategies, its long-term plans and of course the publication of its annual and quarterly results.

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General presentation of Lonza

Learn a little more about the Lonza Company with a detailed presentation, especially of its main activities. As a result, you'll know the different sources of income of the company and will be able to anticipate its most important issues.

The Lonza group is a Swiss company operating in the chemicals sector. More specifically, the group is one of the world leaders in the development, manufacture and marketing of chemicals.

To better understand the group's activities, they can be divided into several divisions according to the percentage of turnover they generate as so:

  • Biopharmaceuticals and nutritional ingredients represent the major part of the activities of this group with 70.4% of the turnover. They relate to proprietary syntheses, microbiological fermentation products, mammalian cell cultures, nutritional ingredients and others. The group also offers dosing solutions for pharmaceuticals, drugs and nutrition products.
  • Organic fine chemicals and performance products generate 28.6% of the group's turnover. These products are intended for food, hygiene, care, wood maintenance and other products.
  • The rest of the turnover, i.e. 1%, comes from a few other products.

It's also interesting to know the geographical distribution of the Lonza group. It realizes 9.7% of its turnover in Switzerland, 28.3% in Europe, 42.3% in the United States, 3.8% in America, 14.2% in Asia, 13.3% in Australia and New Zealand, 0.3% in Africa and 0.1% in the rest of the world.

Analysis before buying or selling Lonza shares
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The major competitors of Lonza

Now let's find out who Lonza's main competitors are in the market with a presentation of the major companies in this sector:

Arkema 

The French group Arkema is of course a giant in the chemicals sector and is particularly known for the specialty chemicals and performance materials it develops. This company operates in over 55 countries around the world and as such employs more than 20,500 people.

Bayer AG 

this German pharmaceutical company has also specialized in agrochemicals since its takeover of Monsanto a few years ago. Bayer particularly specializes in the design and development of medicines, non-prescription health products, veterinary products and phytosanitary products intended primarily for agriculture.

Nestlé 

Finally, there is also competition from the Swiss giant Nestlé, which is one of the leaders in the agrifood industry worldwide. It is also the world's leading agrifood company and the largest dairy company. But Nestlé also produces nutritional ingredients, which puts it in direct competition with Lonza.


The major partners of Lonza

Let's check out two strategic partnerships that the Lonza group has set up with other companies and which have enabled its stock market to gain points quickly.

HES-SO Valais Wallis

In 2020, the Lonza group signed a partnership with HES-SO Valais-Wallis with the aim of building common skills in the training and research sector.

Sanofi 

In 2019, the Sanofi group announced a strategic partnership with Lonza in the construction and operation of a large-scale mammalian cell culture facility in Switzerland dedicated to the production of monoclonal antibodies. The initial investment of this partnership was 290 million Swiss francs or 270 million euros and shared equally between the two partners.

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Positive factors for Lonza shares
The factors in favour of a rise in the Lonza share price:

In order to understand how Lonza's growth is likely to behave in the longer or shorter term, it is necessary to know what its main strengths and weaknesses are, which represent both advantages and disadvantages for this stock. This is why we propose to discover here what are the strong and weak points of this stock at the moment.

Let's start this comparative analysis of Lonza's strengths and weaknesses by summarising its main strengths:

  • First of all, Lonza Group has a relatively high EBITDA/sales ratio. This is an undeniable strength because it means that the company has high margins before depreciation, amortisation and taxes and is therefore profitable in the medium and long term.
  • There is also another weak point concerning the profitability of this company, as it has high net margins. This means that it applies an effective management and cost-cutting strategy and achieves interesting gains on its operations.
  • Still among the main strengths of this stock, we note that analysts have revised upwards their various estimates concerning the next fiscal years and the company's profitability for them. They have also revised their estimates for net earnings per share, or EPS, several times in the last 12 months, which could attract new investors.
  • The various recommendations of the analysts working on this dossier are positive, with recommendations to buy or overweight the stock.
  • Finally, it should be noted that the Lonza Group is implementing an effective business diversification strategy that allows it to stand out from the competition by remaining innovative while protecting itself from the risks of exposure to a single segment.
Negative factors for Lonza shares
The factors in favour of a drop in the Lonza share price:

Now that we have covered the main strengths of the Lonza Group, it is necessary to know its weaknesses as well. Because the company also has its weaknesses, which represent as many disadvantages for this stock on the stock market:

  • First of all, although Lonza's profitability estimates are high, the group has lower sales growth prospects for the coming years.
  • Similarly, while earnings per share are expected to rise in the medium term, growth could be limited according to current analyst estimates.
  • Still among the major weaknesses of this stock, we note that Lonza shares are currently trading at high earnings multiples, i.e. more than 33 times its net earnings per share for the current year. Thus, based on the current share price, Lonza has a significant valuation in terms of enterprise value. The value of the company also appears to be particularly high when compared to the value of its tangible assets.
  • Similarly, the company is very highly valued in comparison to the cash flows generated by its business.
  • It is also regrettable that the Lonza Group does not currently pay a dividend to its shareholders, which may dampen investors' buying intentions.
  • Finally, the group is currently facing very strong competition from several large market players, which could lead to a loss of market share in the long term.
The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

What are the main subsidiaries owned by the Lonza group today?

The Lonza group is established all over the world through various subsidiaries that it operates and that it has either developed or acquired. These include the Lonza subsidiary in the United States, the Lonza subsidiary in the United Kingdom, the Lonza subsidiary in Canada and the Lonza subsidiary in Germany. The group has decided to keep its own name for all its subsidiaries for reasons of consistency and brand image.

How is the capital of the Lonza Company distributed?

The capital of Lonza is 4.58% owned by Fidelity Management & Research, 3.24% by BlackRock Investment Management, 3.02% by Artisan Partners, 2.97% by UBS Asset Management Switzerland, 2.75% by The Vanguard Group, 2.54 % to Templeton Global Advisers, 2.33% to Norges Bank Investment Management, 2.13% to Schroder Investment Management and 1.79% to Zurcher Kantonalbank Investment Management. The rest of the company's capital is floating.

Where can I find the financial results of the Lonza group?

If you want to consult the financial results of the Lonza group, whether it is annual or quarterly results, you can find them easily online. To do so, you can go to the company's website in the dedicated section. You can also find this data on websites specializing in economics and finance or from your broker.

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