Goldman Sachs raises Sonova Holdings target price to CHF 230 and maintains Neutral rating

Overview

This is a Goldman Sachs post-FY26 earnings forecast update report on Sonova Holdings. The report argues that the hearing aid industry has accelerated after previous weakness, with Sonova delivering 10.9% growth in FY26, supported by Virto R, Costco share gains, and a new platform launch in CY26. Goldman Sachs raises its FY27-29e revenue, margin, EBIT, and EPS forecasts, and lifts the target price from CHF 215 to CHF 230, while maintaining a Neutral rating.

Core views

The core views are: first, the recovery in the hearing aids wholesale business is stronger than expected, with Sonova still delivering accelerating growth on a higher base; second, Virto R has annualized revenue of about CHF120m, contributing roughly 350bp to group revenue growth; third, FY27 still has room to grow faster than the market, driven by Virto R, year-over-year Costco share gains, and the new CY26 platform; fourth, estimate upgrades push the target price higher, but valuation and relative return are still insufficient to support a rating upgrade.

Analysis framework

The report first updates earnings forecasts based on the latest industry guidance, Sonova's FY27 guidance, and FX changes, and then reflects those changes in FY27-29e revenue and margin forecasts; valuation uses a 50% DCF and 50% P/E multiple weighting, which is then used to derive the 12-month target price.

Methodology notes

• Valuation methodsDCF and P/E multiple weighted valuation

  12-month target price

  The CHF 230 target price is derived from a 50% DCF and 50% multiple-based weighting; the DCF implies a value of CHF 238/share, assuming a WACC of 7.9% and terminal growth rate of +2.5%; the multiple method applies a 19x P/E to annualized Q5-Q8 EPS, yielding CHF 223/share.

• Earnings ForecastPost-earnings estimate update

  FY27-29e forecast revisions

  Goldman Sachs combines the latest industry guidance, Sonova's FY27 guidance, and FX changes to raise revenue forecasts by 1-2% and margin forecasts by 15-50bp, driving 2-4% upgrades to EBIT and EPS forecasts.

• Factor FrameworkGS Factor Profile

  Growth, financial returns, valuation multiples, and composite percentile

  The appendix discloses that the GS Factor Profile compares stock characteristics versus the market and industry peers across growth, financial returns, valuation multiples, and composite indicators, but the main body of this report does not provide Sonova's specific percentile results.

Asset mapping & comparison

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

• Sonova Holdings (SOON.S)

  Core research target

  Strengths

  FY26 hearing aids wholesale business growth of 10.9%; strong contribution from Virto R; Costco share gains and the CY26 new platform support FY27 growth; margin forecasts have been raised.

  Weaknesses

  The report still maintains a Neutral rating; the 18.4x NTM P/E based on Goldman Sachs forecasts suggests valuation is not obviously cheap; Consumer Hearing has moved into discontinued operations, so comparability of core EPS metrics requires attention.

  Comparison

  Demant and GN both grew around 9%, versus Sonova at 10.9%, indicating stronger performance among peers and acceleration on a higher base.

  Risks

  Phonak Infinio execution falling short of expectations, continued short-term headwinds in the hearing aid category, and rising share for Apple AirPods; upside risks include better Infinio Sphere performance, stronger operating leverage, and further Costco share gains.

Key data

• Sonova FY26 growth+10.9%Growth in the hearing aids wholesale business was stronger than expected and accelerated on a higher comparison base.
• Peer growthDemant +9%，GN +9%Used in the report as peer references for improving conditions in the hearing aids wholesale business.
• Virto R annualized revenue约CHF120mContributed about 350bp to group revenue growth.
• FY27-29e revenue forecast revision+1-2%Mainly driven by Sonova's strong performance in the hearing aids wholesale business.
• FY27-29e margin forecast revision+15-50bpDriving corresponding upward revisions to profit forecasts.
• FY27-29e EBIT and EPS forecast revision+2-4%Driven jointly by higher revenue and margin assumptions.
• 12-month target priceCHF 230Previous value was CHF 215; the increase comes from estimate changes and the roll-forward of the valuation methodology.
• DCF valuationCHF 238/股Uses a WACC of 7.9% and a terminal growth rate of +2.5%.
• Multiple-based valuationCHF 223/股Applies a 19x P/E to annualized Q5-Q8 EPS.
• NTM P/E18.4xBased on Goldman Sachs forecasts.

Impact & implications

The upgrades to forecasts and target price reflect recovering demand in the hearing aid industry, Sonova's product momentum, and improved channel share. Maintaining a Neutral rating means Goldman Sachs recognizes the improvement in earnings momentum, but believes the total return potential versus its coverage universe remains limited; subsequent share price performance will depend more on sustained Virto R volume growth, Costco share gains, the new platform launch, and the delivery of operating leverage.

Risks

• Underperformance in execution of the Phonak Infinio product could weigh on growth and the target price.
• If short-term headwinds in the hearing aid category persist, they could weaken the assumption of FY27 growth above the market.
• Further share gains by Apple AirPods could intensify substitution pressure.
• If operating leverage fails to materialize as expected, it will affect the magnitude of margin, EBIT, and EPS upgrades.
• FX changes could affect FY27-29e revenue and profit forecasts.

What to watch

• Whether Virto R's subsequent sales momentum can continue, especially the incremental contribution on top of its approximately CHF120m annualized revenue base.
• Whether year-over-year share gains in the Costco channel continue.
• The launch timing of the CY26 new platform and early market feedback.
• Execution performance of the Phonak Infinio and Infinio Sphere products.
• The company's FY27 guidance, industry wholesale trends, and FX changes.
• Conflict-of-interest disclosures in the appendix, especially Goldman Sachs' disclosed investment banking and non-securities services client relationships with Sonova Holdings.