Roche 4Q Results – Inline, while going forward many important studies will further magnify the favorable risk-reward profile

January 2012 | 3 pages | ID: R447675A291EN
MP Advisors

Abstracts

Roche 2012 guidance for high single digit EPS growth is below our forecast for double digit growth, but we still continue to see a very favorable risk reward profile in the stock, which will further magnify as we will see new positive data from several important clinical trials in 2012. When most peer group companies are struggling to generate growth, Roche has guided for high single digit growth, which the current valuation fails to appreciate (10x forward earnings) and a 5% forward dividend yield provides a solid hedge on the downside. We see a likelihood of a positive surprise in 2012 earnings, driven by a better than expected ramp up for Zelboraf and Vismodegib and continued robust uptake for Herceptin, Pegasys (aided by increased penetration in EU and Japan), Mircera and Lucentis and Tarceva uptake in first line NSCLC.

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