Stock Analysis & Valuation Gerresheimer AG (GXI.SW)

• Previous Close: CHF65.15
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, CHF	Upside, %
Artificial intelligence (AI)	42.20	-35
Intrinsic value (DCF)	120.70	85
Graham-Dodd Method	19.80	-70
Graham Formula	30.30	-53

Strategic Investment Analysis

Company Overview

Gerresheimer AG is a leading global manufacturer of high-quality packaging products and drug delivery solutions, serving the pharmaceutical, biotech, cosmetics, and medical technology industries. Headquartered in Düsseldorf, Germany, and listed on the Swiss Exchange (SIX), the company operates through three key divisions: Plastics & Devices, Primary Packaging Glass, and Advanced Technologies. Gerresheimer specializes in innovative drug delivery systems such as inhalers, insulin pens, and prefillable syringes, as well as glass packaging for pharmaceuticals and cosmetics. With a history dating back to 1864, the company has established itself as a trusted partner for healthcare and beauty brands, combining precision engineering with regulatory compliance. Gerresheimer’s advanced technologies division focuses on smart drug delivery solutions, including micro-pumps for chronic disease management. The company’s diversified product portfolio and global footprint position it as a critical enabler of the growing demand for specialized packaging and medical devices in an increasingly health-conscious world.

Investment Summary

Gerresheimer AG presents a compelling investment case due to its strong positioning in the pharmaceutical packaging and drug delivery market, which benefits from long-term growth trends in healthcare and biologics. The company’s diversified revenue streams across plastics, glass, and advanced technologies mitigate sector-specific risks. With a market cap of €2.09B and steady revenue of €2.04B (FY 2024), Gerresheimer maintains solid profitability (net income of €109.7M) and a diluted EPS of €2.96. However, investors should note its high total debt (€1.28B) and capital expenditures (€369.8M), which may pressure cash flows. The company’s beta of 0.92 suggests lower volatility than the broader market, appealing to risk-averse investors. A dividend yield of ~1.21% adds income appeal, but growth depends on sustained demand for high-value packaging solutions and successful R&D in smart drug delivery systems.

Competitive Analysis

Gerresheimer AG competes in the specialized pharmaceutical packaging and drug delivery market, where differentiation hinges on regulatory expertise, technological innovation, and global supply chain reliability. The company’s competitive advantage lies in its integrated offering of both plastic and glass packaging, a rarity in the industry. Its Plastics & Devices division competes with contract manufacturers, while its Primary Packaging Glass segment benefits from high barriers to entry due to stringent quality standards. The Advanced Technologies division positions Gerresheimer as a pioneer in smart drug delivery, though this requires ongoing R&D investment. The company’s European base provides proximity to major pharma clients, but it faces pricing pressure from Asian manufacturers in commoditized glass products. Gerresheimer’s scale and long-term client relationships (including with top-tier pharma companies) provide stability, but it must continuously innovate to counter rivals developing alternative materials (e.g., polymer-based vials). Sustainability initiatives, such as recyclable packaging, are becoming a key battleground in the industry.

Major Competitors

• Schott AG (SGK.N): Schott AG is a privately held German leader in specialty glass, notably pharmaceutical vials and syringes. It rivals Gerresheimer in high-value glass packaging but lacks the latter’s plastic drug delivery systems. Schott’s strength lies in its R&D capabilities for borosilicate glass, though its private status limits transparency.
• Air Products and Chemicals, Inc. (APD.N): Air Products supplies medical-grade gases and cryogenic packaging, overlapping with Gerresheimer in specialty pharma solutions. Its US-centric operations and industrial gas focus differentiate it, but it lacks Gerresheimer’s breadth in primary packaging. Strong cash flow supports R&D but exposes it to energy price volatility.
• West Pharmaceutical Services, Inc. (WST): West Pharma is a key rival in injectable drug delivery (e.g., prefillable syringes). It outperforms Gerresheimer in biologics packaging but has minimal glass offerings. Its US market dominance and higher margins (due to proprietary elastomer components) pose a challenge, though Gerresheimer’s European presence balances this.
• Becton, Dickinson and Company (BDX): BD is a medtech giant with competing drug delivery systems (e.g., auto-injectors). Its scale and vertical integration (from devices to diagnostics) exceed Gerresheimer’s, but BD’s focus on hardware over packaging limits direct competition. Gerresheimer’s pure-play packaging focus allows deeper specialization.
• Novartis AG (NOVN.SW): Novartis, as a pharma client, indirectly competes via in-house packaging solutions. Its size gives it bargaining power over suppliers like Gerresheimer, but outsourcing trends favor Gerresheimer’s independent model. Novartis’s focus on therapeutics (not packaging) makes it more partner than competitor.