Roche's short-term results are messy, but full-year targets remain on track; giredestrant's launch in adjuvant breast cancer becomes the focus

Overview

This report is Goldman Sachs' preview of Roche's 1H26 and 2Q26 results and an update to its valuation. The core view is that near-term results may appear less clean due to profit recognition timing, foreign exchange, tax rates, and the historical disposal-gain base effect, but the path to achieving FY26 targets remains credible. Medium- to long-term growth is supported by giredestrant, fenebrutinib, and the broader product portfolio, although the current valuation already largely reflects these positives.

Core views

Goldman Sachs believes Roche's near-term earnings may fall below market consensus, but this is primarily due to temporary and accounting base effects rather than fundamental deterioration. The report expects FY26 guidance to be reaffirmed, limiting the risk of substantial consensus revisions. The bull case is supported by the lack of high-risk binary events in 2H26, the growing importance of the giredestrant adjuvant breast cancer launch as a key investment narrative, and revenue growth visibility extending through 2033. However, the rating remains Neutral because upside to the target price is limited.

Analysis framework

The report compares Goldman Sachs' forecasts with Visible Alpha consensus, focusing on differences in 1H26 core operating profit, core EPS, tax rate, net financial expense, and product revenue. It also incorporates IQVIA prescription data to adjust forecasts for Vabysmo, Ocrevus, Kadcyla, Actemra, and Xolair, and updates the 12-month target price using a blended methodology comprising 50% DCF and 50% P/E valuation.

Methodology notes

• Valuation methodsDCF and P/E blended valuation

  The 12-month target price is derived from a 50% weighting of DCF and a 50% weighting of P/E valuation.

  Goldman Sachs' DCF valuation is CHF346 per share, assuming a 7.4% WACC and 1.5% terminal growth rate. The multiple-based approach applies a 16x P/E to 2027E EPS, resulting in CHF349 per share, for a final target price of CHF348.

• Forecast revisionsIQVIA prescription data tracking

  Prescription and sales trends are used to update key drug revenue forecasts.

  The report lowers forecasts for Vabysmo, Kadcyla, and Ocrevus while raising forecasts for Actemra and Xolair, reflecting changes in prescription trends, the competitive landscape, and the pace of generic erosion.

• Consensus comparisonGSe vs Visible Alpha Consensus

  Goldman Sachs' forecasts are compared with market consensus to identify short-term earnings differences.

  Goldman Sachs expects 1H26 core operating profit to be approximately 2% below consensus and core EPS approximately 5% below, but believes consensus has not fully reflected the temporary impacts.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Roche (ROPC.S)

  Research subject

  Strengths

  FY26 guidance is expected to be maintained; the giredestrant adjuvant breast cancer launch is gradually becoming a core catalyst, and the product portfolio supports revenue growth visibility through 2033.

  Weaknesses

  1H26 earnings may fall below consensus, with near-term results affected by profit recognition timing, foreign exchange, tax rates, and the non-recurring gain base effect; upside to the target price from the current price is limited.

  Comparison

  The report assesses Roche relative to the European pharmaceuticals coverage group and peers, and uses DCF and a 16x P/E multiple on 2027E EPS in its valuation.

  Risks

  Clinical trial results, prescription trends, competitive pressure, generic erosion, continued pressure on the diagnostics business in China, and higher-than-expected R&D and selling, general and administrative expenses.

• giredestrant

  Key pipeline asset and potential growth driver

  Strengths

  The adjuvant breast cancer launch is entering the focus window, and a future lower-risk adjuvant breast cancer indication could further support peak sales upside.

  Weaknesses

  Readouts from some Phase 3 trials remain in the future, and peak commercial sales still depend on trial design, timelines, and launch execution.

  Comparison

  The report believes giredestrant is becoming an important reason for many investors to own Roche.

  Risks

  Clinical readouts, regulatory approval, launch timing, and changes to peak sales guidance.

• Vabysmo

  Key marketed product

  Strengths

  A potential inflection in U.S. utilization trends could support FY26 growth and investor confidence.

  Weaknesses

  2Q IQVIA data were relatively soft, leading Goldman Sachs to lower its FY26-30 forecasts by approximately 3%.

  Comparison

  The report focuses on its recovery and impact on FY26 guidance.

  Risks

  Prescription growth below expectations and intensifying competition.

• Ocrevus

  Key marketed product

  Strengths

  The company previously guided to high-single-digit to low-double-digit growth in 2026.

  Weaknesses

  Goldman Sachs is more cautious on growth, forecasting approximately 9% growth and lowering its FY26-30 forecasts by approximately 1%.

  Comparison

  The report links competitive pressure to Briumvi from TG Therapeutics.

  Risks

  Competition from Briumvi, weak IQVIA data, and slowing sales growth from 2026 onward.

Key data

• 12-month target priceSFr348.00Raised approximately 1% from the previous CHF346.
• Current priceSFr338.80Price disclosed on the report cover.
• Implied upside2.7%Based on the report target price and current price.
• 1H26 core operating profit differentialGSe approximately 2% below VA consensusMainly due to profit recognition timing, foreign exchange, and the other operating income base effect.
• 1H26 core EPS differentialGSe approximately 5% below VA consensusThe 20% tax-rate assumption is above consensus at approximately 19%, and net financial expenses are higher.
• FY26 revenue forecastSFr64,707.1mnRevenue for 12/26E as listed in Goldman Sachs' forecast table.
• FY26 EPS forecastSFr20.08Goldman Sachs' new forecast; the previous forecast was SFr20.18.
• Market capitalizationSFr273.0bn / $337.6bnDisclosed on the report cover.

Impact & implications

For investors, Roche's near-term results may create noise from earnings below consensus, but if management reaffirms FY26 guidance, the market may focus more on the product pipeline and revenue growth visibility beyond 2H26. Assets such as giredestrant and fenebrutinib provide a medium- to long-term narrative, although trends for mature or increasingly competitive products such as Vabysmo and Ocrevus will continue to influence near-term sentiment. Given limited valuation upside, the report recommends maintaining a neutral stance rather than actively adding exposure.

Risks

• Negative Phase 3 results for sefaxersen and divarasib.
• Lack of differentiation in Phase 2 obesity program data.
• Generic erosion faster than expected.
• Continued pressure on the diagnostics business in China.
• R&D and selling, general and administrative expenses above expectations.
• Clinical, regulatory, or commercialization progress for key pipeline assets below expectations.

What to watch

• Whether management explains differences between 1H26 and 2Q26 core operating profit and core EPS versus consensus as temporary factors.
• Whether Roche reaffirms its FY26 sales and core EPS guidance.
• Whether U.S. Vabysmo prescription and sales trends show an inflection.
• The 2026 and subsequent growth outlook for Ocrevus amid competition from Briumvi.
• Regulatory filing progress and safety discussions for fenebrutinib.
• Changes to the design, development timeline, and peak sales guidance for new giredestrant Phase 3 trials.
• Phase 2 data for CT-996 presented at the EASD meeting from September 28 to October 2, 2026.