Lonza falls as DB cuts stock to 'hold' on soft 2024 guidance

Kodiak Sciences

18/10/2023 08:48

** Shares in Lonza  LONN.S  edge down 1.4% after Deutsche
Bank cuts the Swiss contract drug manufacturer to "hold" from
"buy" citing the group's "surprisingly soft" forecast for 2024
    ** Lonza shares plunged around 16% on Tuesday, its worst day
since January 2015, after it cut its 2024 margin target again
    ** DB says it is "difficult to only call it conservative",
noting the guidance should trigger 15% downward revisions to
consensus 
    ** In addition to cancelled projects with Moderna  MRNA.O 
and Kodiak  KOD.O , the brokerage points to likely continued
weakness in the Cell & Gene and nutraceuticals units, along with
Biologics due to lower biotech funding
    ** "Given no growth next year, uncertainties around the CEO
replacement, and a lack of potential catalysts over the next few
months, we do not expect the market to attribute much value to
the growth outlook beyond 2024 at this point," it adds
    ** DB raises its 2023 earnings estimate for Lonza due to the
one-time Moderna contract termination fee, but lowers adj. EPS
forecast by 20% for 2024
    ** Out of 20 analysts that cover Lonza, 17 rate it "buy" and
above, two "hold" and one "sell"

 (Reporting by Anna Mackenzie)
 ((Anna.mackenzie@thomsonreuters.com))