Lonza Earnings: Biologics and Cell and Gene Therapies Should Deliver Strong Long-Term Growth

Narrow-moat Lonza provided a first-quarter 2024 qualitative update, and the company is tracking our expectations. Management will release additional details when it reports its half-yearly results in July. We continue to forecast flat sales growth in 2024, which reflects the impact of Moderna's canceled contract for its covid vaccine. However, we maintain our positive long-term outlook for Lonza thanks to strong demand for outsourced manufacturing of biologics and cell and gene therapies. We maintain our fair value estimate of CHF 530 per share, and we view the stock as fairly valued, currently trading in 3-star territory.