Trading Idea: Lonza (LONN-CH)

We had an Enter Long Strategic signal on June 10, 2021, triggered by our system on Lonza, LONN-CH, the Swiss Medtech company.

Our system also triggered an Enter Long Tactical signal on October 21, 2021 that imply a likely bullish acceleration. Lonza has a rather strong track record, with a Behavioral score of 10/10, therefore the bullish signal is to be considered as Strategic.

Lonza is a CHF 56.2 Bn market cap Medtech company and a supplier to the pharmaceutical, healthcare and life science industries. The Company's offerings include custom development & manufacturing of drugs and drug delivery systems, as well as development of anti-microbial solutions for commercial applications. Pharma & Biotech segment comprises the Company's Biologics, Small-Molecule, and Consumables and Research Tools businesses. The segment includes mammalian, microbial, chemical, bioconjugates, cell and gene therapy technology platforms. The Specialty Ingredients segment has been sold to Bain capital and Cinven for CHF 4.2 Bn. This will refocus Lonza around the Pharma, Biotech and Nutrition business with a stronger cohesion between the four divisions within the segment.

Lonza announced several months ago a ten-year strategic collaboration with Moderna for their mRNA platform, starting with being the manufacturing partner for Moderna's COVID-19 vaccine. This expanded Moderna's manufacturing capacity by 10 times, with the goal of up to 1 billion doses per year. The deal also marks the start of a wider collaboration with Moderna, as further manufacturing projects are anticipated from its clinical portfolio in the future.

For 2021, Lonza expect to post revenue of CHF 5.2 Bn coupled with a 23.5% EBIT margin. EPS growth is expected to reach double digit in the next 3 years.

Short term catalyst : Moderna partnership, acquisitions.

This signal looks consistent with the European Medtech sector in Major Bullish trend, while there is 54% of Medtechs companies in Tactical signal and 63% in Strategic signal.