Roche faced significant headwinds from exchange rates in the first half of 2026. Consequently, the key financial metrics in the reporting currency, the Swiss franc, are below the prior-year figures. On Thursday, the pharmaceutical company reaffirmed its previous targets for the full year. In the first six months, Roche generated sales of 30.4 billion Swiss francs. While this represents a 2.0 percent decline in the reporting currency (Swiss francs), it translates to a 6.0 percent increase at constant exchange rates. The company has thus met its own target, which is based on constant exchange rates. As usual, the larger Pharmaceuticals division contributed the lion’s share of group revenue, with 23.6 billion (-1.0%). In the Diagnostics business, Roche generated revenue of 6.7 billion (-3.0%). The diagnostics business is still feeling the effects of a pricing reform in China. Core operating profit, which analysts use as a benchmark, fell by 1 percent (+10% at constant exchange rates) to 11.9 billion Swiss francs. With the reported figures, Roche remains just in line with analysts’ estimates. Regarding the future business outlook, management led by CEO Thomas Schinecker confirms its previous guidance. At constant exchange rates, sales are expected to rise in the mid-single-digit percentage range. Core earnings per share are forecast to increase in the high single-digit percentage range. In addition, the Group remains committed to increasing the dividend in Swiss francs.

The Swiss stock market slightly extended the previous day’s gains on Wednesday—buoyed by gains in blue-chip stock Nestlé (+2.2%). The SMI rose 0.1 percent to 14,316 points. Jefferies had upgraded Nestlé stock to “Buy” and raised its price target. In addition, the Financial Times (FT) reported that the food company intends to sell about half of its European water business. According to the FT, the company is close to finalizing a deal with private equity firm Platinum Equity. Shares of pharmaceutical supplier Lonza plunged 4.9 percent following the release of its earnings report. Despite strong profit figures, the company did not raise its revenue forecast, JP Morgan noted critically. U.S. President Donald Trump announced tariffs on generic drug imports starting in 2028. The tariffs are intended to encourage drug manufacturers to shift their production to the U.S. Sandoz shares dropped 3.9 percent. Adecco shares climbed 9.1 percent following positive financial results from competitor Randstad.

Europe
European stock markets closed higher on Wednesday. According to preliminary data from Marketwatch, the Stoxx Europe 600 index rose 0.6% to 647.08 points. In Paris, the CAC 40 and the SBF 120 each gained 0.9%, closing at 8,437.89 points and 6,380.13 points, respectively. In Frankfurt, the DAX 40 added 0.7%, while the FTSE 100 advanced 1.2% in London following the announcement of a slowdown in inflation in the United Kingdom. AIRBUS (+7%): The aircraft manufacturer announced Tuesday evening that it is targeting adjusted operating profit of between 12 billion and 13 billion euros in 2029 and confirmed its financial targets for 2026. The group also stated that its board of directors had approved a three-year share buyback program worth 5 billion euros. IBERDROLA (+0.3%): The Spanish energy company reported Wednesday that its net income increased nearly 22% year-over-year in the first half of the year, reaching 4.34 billion euros. Revenue, meanwhile, was up 1.7% year-over-year to 22.47 billion euros. SANTANDER (+1.4%): The Spanish bank confirmed on Wednesday that its net income for the second quarter plummeted nearly 36% compared to the previous quarter, to 3.52 billion euros. This decline is primarily due to restructuring costs related to the acquisition of the British bank TSB, as well as an unfavorable basis for comparison resulting from the sale of a major stake in Poland during the previous quarter, which had boosted profits.

United States
U.S. stocks were little changed Wednesday as oil prices extended gains, while investors braced for a wave of major earnings. The Dow Jones Industrial Average fell 6.06 points, or 0.01%, to 52218.58. The S&P 500 slipped 10.24 points, or 0.14%, to 7498.96, while the Nasdaq Composite lost 146.30 points, or 0.57%, to 25690.90. Super Micro Computer surged nearly 20% after the AI server maker secured more than $60 billion in new orders during the quarter. Rivals Dell Technologies and Hewlett Packard Enterprise also rose on the news. AT&T gained 3.5% after reporting higher revenue and stronger-than-expected customer additions. GE Vernova fell 8.7% after its second-quarter earnings per share missed analyst estimates, even as the power equipment maker raised its full-year guidance and said its total order backlog had reached $176 billion. Prologis sweetened its takeover bid for U.K. warehouse owner Segro to nearly $19 billion, sending Segro shares higher. Nike shares fell after analysts called its decision to consolidate online sales in China by cutting off most third-party e-commerce vendors a strategic misstep. Looking ahead, Intel, American Airlines, Comcast and Lockheed Martin report Thursday.

Asia
Asian stocks were mixed on Thursday. The region’s markets are led by the Seoul Stock Exchange, where the Kospi is up 3.7 percent. Chip giants Samsung Electronics and SK Hynix are rising 3.4 and 4.3 percent, respectively. On the Tokyo Stock Exchange, the Nikkei 225 index added 0.5 percent; the broader Topix advanced 0.6 percent. Here, too, chip stocks were among the gainers. Renesas increased 1.1 percent, Lasertec 4.7 percent, and Advantest 3.7 percent. In Hong Kong, the Hang Seng Index gained 1.3 percent. Meanwhile, on the Shanghai Stock Exchange, the Composite Index slipped 0.2 percent. Oil prices continued to climb. The price of a barrel of Brent crude increased 2.1 percent to $96.07.

Bonds
Long-dated U.S. government debt yields climbed on Wednesday. The 10-year Treasury note yield added 0.029 percentage point to 4.657%, its second-highest level for this year, as the oil surge stoked inflation fears. Traders now see roughly a 25% chance of a rate hike at next week's Fed meeting, up from about 16% at the start of the week, and a roughly 50% chance of two hikes before year-end.

Analysis
Citi raises Novartis target to CHF 142 (132) - Buy
Berenberg lifts Bossard target to CHF 250 (228) - Buy
Jefferies upgrades Nestlé to Buy (Hold) - Target CHF 99 (84)

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