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Sandoz Group AG Registered Shares SDZ

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Stock XSWX Rating as of
CHF 34.46 +0.29 (0.85%)
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As of Delayed Price Open

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Sandoz: Strategic Review Signals Business as Usual, With Long-Term Drivers Intact

Keonhee Kim

No-moat Sandoz hosted a strategic review recently where it laid out a high-level overview of the generics and biosimilars industry, how the firm looks today in these dynamic markets, and where it aims to go. Overall, we think the event addressed nothing materially new to us but instead was used to educate investors what the firm has been working on since spinning off from its Novartis and going public last October. After making minor updates to our model and accounting for time value of money, we inch up our fair value estimate to CHF 35.50 per share from CHF 34.50.

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Price vs Fair Value

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SDZ is trading at a 518% premium.
Price
CHF 34.17
Fair Value
CHF 62.50
Uncertainty
High
1-Star Price
CHF 22.24
5-Star Price
CHF 28.60
Economic Moat
Wff
Capital Allocation
Lsrczykr

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 the drug supply chain continue to exert their forces.

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Trading Information

Previous Close Price
CHF 34.17
Day Range
CHF 34.24–34.83
52-Week Range
CHF 22.70–38.52
Bid/Ask
CHF 34.47 / CHF 34.50
Market Cap
CHF 14.82 Bil
Volume/Avg
220,487 / 853,574

Key Statistics

Price/Earnings (Normalized)
19.65
Price/Sales
1.64
Dividend Yield (Trailing)
1.32%
Dividend Yield (Forward)
1.32%
Total Yield
1.32%

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 its 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)
 19.654.156.49
Price/Book Value
 1.950.703.11
Price/Sales
 1.640.901.20
Price/Cash Flow
 21.214.3212.37
Price/Earnings
SDZ
VTRS
TEVA

Financial Strength

Metric
SDZ
VTRS
TEVA
Quick Ratio
 0.610.650.46
Current Ratio
 1.221.530.89
Interest Coverage
 0.78−0.130.83
Quick Ratio
SDZ
VTRS
TEVA

Profitability

Metric
SDZ
VTRS
TEVA
Return on Assets (Normalized)
 4.37%7.02%7.18%
Return on Equity (Normalized)
 9.95%16.41%43.52%
Return on Invested Capital (Normalized)
 9.73%9.80%13.87%
Return on Assets
SDZ
VTRS
TEVA

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