Lonza rises +14% on earnings after a year of downward revisions

There's only one stock outdoing LVMH this morning in €IG & its pharma/biotech name Lonza Group (+14%) - not a huge issuer & single rated by S&P on BBB+ since issuance for its €27's/33's. It reported earnings this morning with FY23 EBTIDA at CFH2b vs. c1.9b with a margin beat as well - sees flat sales growth (constant currency) for FY24 & EBITDA margin in high 20's - margin expectations already seem in line with that, but consensus seemed to be looking for a fall in earnings next year driving some surprise today - adding onto that its proposed a CHF 4/share dividend - 14% increase form FY22 but within the top range of its payout ratio (44% vs. 35-45%). It has CHF1b remaining in its share buyback program that was a two year commitment till 2Q25 & reiterated its target is to maintain BBB+ rating. Leverage at 0.5* for the FY - it sees that rising to 1.5-2*. over 24-28 with CAPEX at 25% in FY24 and falling to "mid-to-high teens" further out - its been running strong cash position/-ve net debt recently but S&P initiated BBB+ rating when leverage was circa mid 2's (S&P adjusted ~3* - it saw downgrade ratio if leverage moved to 3.5*).

Equities are paring losses from earlier this year on earnings revisions (downwards) citing at the time "lower growth than expected in early-stage services and continued weak demand in the nutraceutical capsules market," (July) & later on Moderna scrapping agreement for production of Covid shots (Oct) - rating outlooks were unch through the earnings revisions this year. Its €500m 10y/May 33's which it priced earlier this year has cheapened +10bps from issuance - still screens relatively tight. Mid's streaming 2-4bps tighter today across € & smaller CHF lines.