Key Morningstar Metrics for Roche
- : CHF 381Fair Value Estimate
- : ★★★★Morningstar Rating
- : WideMorningstar Economic Moat Rating
- : LowMorningstar Uncertainty Rating
What We Thought of Roche’s Earnings
Roche ROP reported a 5% decline in first-quarter sales, with constant currency growth of 6% driven by pharmaceuticals (7%) and diagnostics (3%). Management maintained 2026 constant currency guidance for mid-single-digit top-line and high-single-digit core EPS growth. Shares rose 3% intraday April 23.
Why it matters: While the Swiss franc continues to strengthen against the US dollar, Roche’s underlying business is generating solid mid-single-digit growth.
- Roche does not face the same patent cliff that is weighing on many of its peers, as the biggest exposure looks like Ocrevus in 2029 (11% of total sales).
- We think pipeline productivity is improving and expect tailwinds from the launch of new breast cancer drug giredestrant in 2027 and several diagnostics developments, including improved Alzheimer’s blood tests as well as new sequencer and mass spectrometry launches.
The bottom line: We’ve raised our fair value estimates for wide-moat Roche to CHF 381/USD 60 from CHF 364/USD 57 after increasing our long-term sales assumptions for giredestrant. We’re encouraged by the US Food and Drug Administration’s priority review in early-stage breast cancer and the significant potential lead over competitors.
- Roche has cited at least USD 20 billion potential for this new class of drugs, with at least USD 14 billion from early-stage patients alone. While AstraZeneca and Eli Lilly also have SERD therapies, early-stage breast cancer data won’t be available until at least 2027, giving Roche a significant lead.
- We now assume more than CHF 4 billion in giredestrant sales by year 10 of our model, making it stand out as the largest pipeline opportunity driving our valuation. Shares look roughly 15% undervalued at recent prices, which we think underestimate Roche’s pipeline.
