Roche reported a decline in full-year net profit on expenses related to the takeover of California-based biotech firm Genentech last year, but said brisk sales of flu drug Tamiflu and cancer medicines drove revenue higher. Sales of prescription drugs are off to a strong start in 2010, the drug maker said, and will probably rise around 5% this year.Net profit attributable to shareholders fell 13% to 7.78 billion Swiss francs ($7.36 billion) from CHF8.97 billion, below the CHF8.22 billion expected by analysts. For the full year, sales rose 8% to CHF49.05 billion from CHF45.62 billion. In local currencies, sales increased at a faster 10% pace, underlining that the Swiss franc's strength last year pressured earnings.

Roche's 2009 figures show that it will see 15% earnings growth over the next five years, rather than the 10% currently projected by consensus, says JPMorgan analyst. 2009 figures were better than seen by the market as some had incorrect forex assumptions in their models. Also likes the company's dividend yield. Has overweight rating, CHF237 target.

Cancer drug Avastin may not make as much money as currently forecast by analysts through '12, says Nomura. Notes management said there's an increased risk for the FDA calling for an advisory committee meeting before deciding on the approval of the drug in late-stage breast cancer. "We estimate that around CHF1.5B of Avastin '12 sales consensus of CHF9B could be at risk in a worst case scenario," analyst says. Has neutral rating, CHF150 price target. 

Investors should buy into Roche's share price weakness after the company's earnings came in below expectations Wednesday, says Credit Suisse. "We like Roche's valuation and its improved outlook for positive news in '10 from Avastin, Actemra and Taspoglutide," Credit Suisse says. Has outperform rating, CHF200 price target.

UBS cuts Roche to neutral from buy, target to CHF190 from CHF192, also 2010 EPS estimate to CHF13.45 from CHF14.44 and 2011 EPS to CHF15.14 from CHF16.26 following the company's 09 figures. "A lack of catalysts in the next three to four months and risk from new oncology products and trials at the cancer conference ASCO are likely to have the shares underperform the sector into June," says UBS.