Roche Shares (ROG) Gain Ground as Citi Initiates Coverage with Bullish Outlook

Roche Holding AG shares rose 0.5% to CHF 352.30 this morning, following the initiation of coverage by Citi with a Buy rating and a price target of CHF 400.

The investment bank's optimistic stance centres on the Swiss pharmaceutical giant's strengthening pipeline and anticipated royalty revenues from Eli Lilly's oral diabetes and obesity drug orforglipron, which analysts expect to materially enhance growth and margins from the second quarter of 2026 onwards.

Citi's CHF 400 price target implies an upside of approximately 13.5% from current levels, reflecting confidence in Roche's ability to navigate patent cliffs on legacy products while building momentum in newer therapeutic areas. The firm highlighted improvements across Roche's development pipeline as a key driver for the positive rating, suggesting that the company's innovation engine is gaining traction after a period of investor concern over declining revenues from older blockbuster drugs.

The orforglipron royalty stream represents a potentially significant revenue opportunity for Roche through its Chugai Pharmaceutical subsidiary, which originally discovered the compound. Under the licensing agreement with Eli Lilly, Chugai is entitled to tiered royalty payments ranging from mid-single digits to low teens on worldwide net sales of the oral GLP-1 receptor agonist.

With obesity and diabetes treatments commanding premium valuations in current markets, these royalties could provide a meaningful boost to Roche's financial profile beginning in mid-2026. Lilly has advanced orforglipron through late-stage clinical trials as it seeks to compete in the rapidly expanding weight-loss drug market dominated by injectable therapies.

Citi's initiation follows a recent wave of rating adjustments from other major financial institutions. Goldman Sachs upgraded Roche from Sell to Neutral earlier this year, raising its price target to CHF 365 based on reduced catalyst risks and improved growth potential from positive trial results for fenebrutinib in multiple sclerosis and giredestrant in breast cancer.

UBS also turned more constructive, upgrading the stock from Neutral to Buy with a CHF 338 target, citing sustained performance from key drugs Vabysmo and Ocrevus alongside potential gains from Xolair for food allergies and Elevidys in international markets.

Price Targets

The positive momentum from Citi's coverage, combined with anticipated orforglipron royalties and solid operational execution, appears to be shifting market sentiment toward a more favourable view of Roche's prospects.

While valuation debates persist, the company's ability to deliver pipeline progress and secure external revenue streams through strategic partnerships may provide the foundation for sustained share price appreciation in the coming quarters.