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How Much Upward Potential Does Roche Really Have?

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Jul. 15 2016, Published 8:02 p.m. ET

Analyst recommendations for Roche

According to Roche Holding’s (RHHBY) event calendar, it should report earnings for the second quarter and the first half of 2016 on July 21, 2016. The company is a leading global healthcare firm based out of Basel, Switzerland, that primarily focuses on oncology. (For a deeper look at Roche’s valuation, you can refer to “What Does Roche’s Valuation Indicate?“)

As the graph above shows, out of four brokerage firms surveyed by Bloomberg on July 14, 2016, three rated Roche as a “buy,” while one rated the company as a “hold.” None of the brokerage firms issued a “sell” rating on the stock.

The consensus 12-month target price for Roche is $37.2. This translates to a ~15.1% return compared to Roche’s closing price of $32.3 on July 13, 2016.

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Analyst recommendations for peers

According to a Bloomberg survey of seven analysts on July 14, 2016, 57.1% of analysts issued a “buy” rating for Novartis AG (NVS), whereas 42.9% suggested a “hold.” With a consensus price of $92.5, Novartis presents a return potential of 12.8%.

Based on a Bloomberg survey dated July 14, 2016, of 27 analysts covering Bristol-Myers Squibb (BMY), 51.9% believed it should be a “buy,” 40.7% recommended a “hold,” and 7.4% rated the stock as a “sell.” With a consensus price of $77.1, the stock presents an upward potential of only 0.7% over a 12-month period.

The Bloomberg consensus of 26 analysts as of July 14, 2016, indicates that 61.5% of analysts issued a “buy” rating for Pfizer (PFE), whereas 38.5% recommended the stock should be a “hold.” The remaining 4.8% suggested a “sell.” Pfizer presents an opportunity to earn 6.6% over the next year, with a consensus target price of $38.7.

Because direct investments in stocks can be risky, investors can consider options such as the Vanguard FTSE All-World Ex-US Index Fund (VEU), which has 0.58% of its total holdings in Roche’s stock.

Now let’s look at Roche’s sales expectations for 2Q16.

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