Roche: Restating for Tamiflu, 2012 was in line with expectations while the 2013 outlook is cautious

NEUTRAL vs. BUY, Fair Value CHF202 (0%)

News published on January Wednesday 30, 2013
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Revenues in 2012 stood at CHF45.5bn, up 4% CER and up from previous quarter as Diagnostics is in a better shape but also because Tamiflu helped a lot (out of the 7pp increase in Q4, we calculate a 3pp contribution from the antiviral). Core operating profit is also higher by the same magnitude mostly because gross margin expanded in Pharma with higher royalties and lower cost of sales. However, as net financial charges were higher in H2 than in H1 and tax rate stable, Core EPS was just in line with expectations at CHF13.62 up 10% for the year. Our fear referred to the risk of a cautious guidance for 2013 and here it is worse than expected as Roche is not even committing to high single digit Core EPS growth but simply to growth “ahead of sales”. Consensus expectations for 2013 now look ambitious.

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