RBC Upbeat on Lonza's CDMO Deal with Merck KGaA; Forecasts Updated

06:04 AM EST, 11/05/2026 (MT Newswires) -- RBC Capital Markets positively views Lonza Group's (LONN.SW) recently announced acquisition of five contract development and manufacturing organization sites in the US from Germany's Merck KGaA (MRK.F), particularly in terms of return on invested capital. "We have integrated the Merck CDMO acquisition into our model, resulting in a 3% increase in 2028 sales and 1% in profit forecasts. We estimate that the acquisition was at a near-term EBITDA multiple of c.9-12x and a peak EBITDA multiple of c.1.75x, making this a potentially higher peak ROIC investment than Vacaville," analysts said Wednesday. "While this has minimal impact on our near-term valuation approach, it demonstrates the potential long-term value of Lonza's strong balance sheet." Against this backdrop, RBC raised the stock's price target to 820 francs from 760 francs, as it rolled forward its unchanged 18x EBITDA multiple and applied it to an average of its 2027 and 2028 estimates. The outperform recommendation on the stock was reaffirmed. The research firm also made changes to its forecasts for 2027 and 2028, including higher revenue and EBITDA assumptions.