GILD - More Of The Same Isn't Good Enough For Roche
2024-06-18 16:03:19 ET
Summary
- Roche continues to face challenges tied to lackluster revenue and profit outlook, questionable pipeline, and an underperforming diagnostics business.
- Roche spends aggressively on its pipeline (R&D and M&A) and is more successful than peers in converting R&D to revenue by some metrics, but trailing growth rates are quite lackluster.
- If key pipeline candidates like tiragolumab, prasinezumab, and RG6631 come through, Roche could see revenue and earnings reacceleration.
- Roche shares offer a high single-digit prospective long-term return and Street expectations seem muted, but execution will be critical.
When I last wrote about Roche Holding AG ( OTCQX:RHHBY ), I was worried that a lackluster near-term revenue and profit outlook, coupled with a questionable pipeline and what I regard as uninspired management, raised the risk that the stock would languish as a value trap, with iffy pipeline productivity driving the company toward more M&A to reinvigorate the clinical side and boost future growth prospects....
More Of The Same Isn't Good Enough For Roche