What’s wrong with the Roche share price? A buy opportunity for the Swiss dividend stock?

Over the past month the Roche share price has plateaued, following a strong start to the year which continued up to August.

Having reached an all-time-high of CHF 413.20, the Swiss multinational healthcare company retreated to CHF 393.39 at the time of writing.

With its recent sideways trading, investors will be curious whether or not now represents a good buying opportunity for the Swiss dividend stock.

The pharma company’s strong presence in the oncology market, the high levels of demand for its breast cancer drugs and its recent expansion into immunology all bode well for Roche’s outlook.

Having benefited from strong demand for Covid tests, Roche appears to be maintaining its momentum.

The group also continues to reliably pay a dividend of 2.55%.

An analyst from Deutsche Bank has given Roche a ‘Buy’ recommendation with a price target of CHF 425 with these factors in mind.

Having said that, the firm does face stiff competition across its markets, specifically with some of its key drugs, along with balance sheet concerns.

As of June 2021, Roche has debts to the value of CHF 15bn. Although it does have CHF 8bn in cash reserves to somewhat offset this large sum.

While its share price is trading reasonably high, this may not put off investors, but it could become a cause for concern if things get worse.

Additionally, Roche’s interest payments on its debt are well covered by EBIT (50.8x coverage).

It seems Roche has its debt under control, which should put investors' minds to rest. Therefore its outlook will depend on its ability to innovate and outcompete its rivals in a packed field.

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