{"id":40923,"date":"2026-03-29T12:01:31","date_gmt":"2026-03-29T12:01:31","guid":{"rendered":"https:\/\/www.europesays.com\/ch\/40923\/"},"modified":"2026-03-29T12:01:31","modified_gmt":"2026-03-29T12:01:31","slug":"will-roche-stock-rebound-to-its-2022-highs-of-50","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ch\/40923\/","title":{"rendered":"Will Roche Stock Rebound To Its 2022 Highs of $50?"},"content":{"rendered":"

The stock price of\u00a0Roche (OTCMKTS: RHHBY)<\/a>\u00a0trades at $35 per share, about 33% below its peak level of over $53 seen in April 2022. In contrast, its peer Bristol Myers Squibb stock<\/a> (NYSE: BMY) saw a 48% decline over this period. RHHBY stock was trading at $42 in early June 2022, just before the Fed started increasing rates, and is now 17% below that level, compared to a substantial 45% gain for the S&P 500 during this period. In this analysis of Roche\u2019s upside post-inflation shock, we capture trends in the company\u2019s stock during the turbulent market conditions seen over 2022. We compare these trends to the stock\u2019s performance during the 2008 recession.<\/p>\n

Notably, RHHBY stock has underperformed the broader market in each of the last three years. Returns for the stock were 18% in 2021, -24% in 2022, and -7% in 2023. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 24% in 2023 \u2014 indicating that RHHBY underperformed the S&P in 2021, 2022, and 2023. In fact, consistently beating the S&P 500 \u2014 in good times and bad \u2014 has been difficult over recent years for individual stocks; for heavyweights in the Health Care sector including UNH and JNJ, and even for the megacap stars GOOG, TSLA, and MSFT. In contrast, the Trefis High Quality (HQ) Portfolio<\/a>, with a collection of 30 stocks, has\u00a0outperformed the S&P 500 each year\u00a0over the same period.\u00a0Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in\u00a0HQ Portfolio performance metrics<\/a>.<\/p>\n

Given the current uncertain macroeconomic environment with high oil prices and elevated interest rates, could RHHBY face a similar situation as it did in 2021, 2022, and 2023 and underperform the S&P over the next 12 months \u2014 or will it see a recovery? From a valuation perspective, we think Roche stock has a little upside. We estimate\u00a0Roche\u2019s Valuation<\/a>\u00a0to be $37 per share, about 6% above its current market price.<\/p>\n

2022 Inflation Shock
Timeline of Inflation Shock So Far:<\/p>\n

In contrast, here\u2019s how RHHBY stock and the broader market performed during the 2007\/2008 crisis.<\/p>\n

Timeline of 2007-08 Crisis<\/p>\n

10\/1\/2007: Approximate pre-crisis peak in S&P 500 index
\n9\/1\/2008 \u2013 10\/1\/2008: Accelerated market decline corresponding to Lehman bankruptcy filing (9\/15\/08)
\n3\/1\/2009: Approximate bottoming out of S&P 500 index
\n12\/31\/2009: Initial recovery to levels before accelerated decline (around 9\/1\/2008)<\/p>\n

Roche and S&P 500 Performance During 2007-08 Crisis<\/p>\n

RHHBY stock declined from $22 in September 2007 (pre-crisis peak) to around $13 in March 2009, as the markets bottomed out, implying it lost 41% of its pre-crisis value. It recovered to $22 in early 2010, reflecting a 69% rise between March 2009 and January 2010. The S&P 500 Index saw a decline of 51%, falling from levels of 1,540 in September 2007 to 757 in March 2009. It then rallied 48% between March 2009 and January 2010 to reach levels of 1,124.<\/p>\n

\"\"<\/a><\/p>\n

Roche\u2019s Fundamentals And Financial Position<\/p>\n

Roche\u2019s revenue<\/a> has declined 7.2% from $72.4 billion in 2021 to $67.2 billion in 2023. This can primarily be attributed to lower demand for its Covid-19 testing. Excluding the Covid-19 products, Roche has benefited from the continued uptick of its relatively new drugs, including Perjeta, Kadcyla, Alecensa, Tecentriq, Hemlibra, Vabysmo, and Ocrevus. These drugs are expected to be the key growth drivers for Roche as it battles with biosimilar competition for its previously top-selling drugs \u2013 Avastin, Herceptin, and Rituxan \u2013 which have seen their combined sales fall a significant 41% to $5.4 billion in 2023, compared to $9.1 billion in 2021. The sales of these three drugs combined peaked at $21 billion in 2018.<\/p>\n

Roche also saw its adjusted net income margin contract by 120 bps to 24.7% over this period. Its bottom line stood at $2.58 on an adjusted basis in 2023, versus $2.72 in 2021.<\/p>\n

Roche\u2019s total debt increased marginally from $34.3 billion in 2021 to $34.8 billion in 2023, while its cash decreased from $14.3 billion to $12.5 billion over the same period. The company\u2019s debt is around 15% of the company\u2019s equity and its cash is around 12% of its assets, implying a good financial position.<\/p>\n

Conclusion<\/p>\n

The potential upside could be over 50% if the stock recovers from $35 currently to its pre-shock levels of $53. With the Fed\u2019s efforts to tame runaway inflation rates helping market sentiments, we think RHHBY stock will likely see higher levels over time. The move in Roche stock will be driven by the developments around its pipeline, which includes an experimental weight-loss drug \u2013 CT-388 \u2013 which showed positive early-stage trial results. While we think that Roche\u2019s pharmaceuticals business may see tepid growth in the near term, its diagnostics business will likely see a rebound. A blood test to support an earlier diagnosis of Alzheimer\u2019s was designated as a breakthrough device by the U.S. FDA earlier this year.<\/p>\n

Returns
\nJun 2024
MTD [1]
\n2024
YTD [1]
\n2017-24
Total [2]<\/p>\n

\u00a0RHHBY Return
\n9%
\n-3%
\n23%<\/p>\n

\u00a0S&P 500 Return
\n4%
\n15%
\n144%<\/p>\n

\u00a0Trefis\u00a0Reinforced Value Portfolio<\/a>
\n2%
\n7%
\n658%<\/a><\/p>\n

[1] Returns as of 6\/21\/2024
[2] Cumulative total returns since the end of 2016<\/p>\n

Invest with\u00a0Trefis\u00a0Market-Beating Portfolios
<\/a>See all\u00a0Trefis\u00a0Price Estimates<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"The stock price of\u00a0Roche (OTCMKTS: RHHBY)\u00a0trades at $35 per share, about 33% below its peak level of over…\n","protected":false},"author":2,"featured_media":40924,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[124],"tags":[23810,20405,23808,23809,151,23805,23807,134,23806],"class_list":{"0":"post-40923","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-roche","8":"tag-bmy","9":"tag-jnj","10":"tag-mrk","11":"tag-pfe","12":"tag-rhhby","13":"tag-rhhby-stock","14":"tag-rhhby-valuation","15":"tag-roche","16":"tag-roche-revenues"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ch\/116312361081280596","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/40923","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/comments?post=40923"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/40923\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media\/40924"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media?parent=40923"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/categories?post=40923"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/tags?post=40923"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}