Sanofi (SAN FP) France
Healthcare
Intron has conducted a foundational analysis that investors can refer to over the next 18 months as SAN releases at least 15 P2 & P3 pipeline readouts. They highlight the upside potential from every single readout and show that just 4 drugs could add €18/share. In addition, the likely Consumer Health spin in Q4, the tolebrutinib overhang being resolved and a strong COPD launch sets the group up for a strong 2H24 and even stronger 2025. Intron increases their end-2025 TP to €120.
Edition: 196
- 04 October, 2024
Plenty of value on offer in Big Pharma
Healthcare
The sharp fall in the median implied to Y3 EBITM ratio for Willis Welby’s Healthcare coverage is all about Pharma. This leaves a median ratio for the subsector of just 94 which gets you good financial productivity, neutral revisions and a median consensus Y3 revenue growth rate of 7.4%. While the share price of Novo Nordisk discounts a lot of success, at the other end of the scale there are some companies where ratios seem to be getting more cautious without much obvious justification. GSK and Sanofi’s share prices are both consistent with a catastrophic future which makes no sense. Roche is not far behind. Given the normal dislocation of Pharma dynamics from wider economic ones this also looks like a major opportunity from a risk management perspective as well as from a value perspective.
Edition: 173
- 10 November, 2023
UK Healthcare: Value funds drive underweight
Healthcare now stands as the third largest underweight risk to UK investors (behind Consumer Staples and Energy) driven by two key factors: 1) AstraZeneca positioning. The net underweight of -2.62% accounts for more than the net underweight of -2.36% for the entire sector. Overweights in Smith & Nephew, ConvaTec and out-of-benchmark Sanofi provide the partial offset. 2) Value Fund positioning. Active UK Value managers are seemingly happy to let underweights increase, with a huge gap of -6.27% vs. the FTSE All Share weight. Value managers are banking on some serious underperformance.
Edition: 151
- 06 January, 2023
France: Europe's high conviction holding
Global equity managers are positioned at their highest ever overweight in French equities - average holding weights have moved towards the top end of the 8-year range at 4.16%, pushing net overweights to a record +1.48% above the iShares ACWI ETF benchmark. Out of the 365 global funds in Copley’s analysis, 64.4% are overweight France compared to the ACWI index. Aggressive Growth and Yield managers have led the charge. On a stock level, LVMH is the most widely held name, while Sanofi and Capgemini have benefited from fund rotation this year.
Edition: 141
- 05 August, 2022
Sanofi (SAN FP) France
Healthcare
Start of a multi-year EPS upgrade cycle - SAN is the most obvious Buy since AstraZeneca in its early transformation several years ago - Intron shows there is 11% CAGR EPS growth (2021-26), 6% CAGR sales growth, a burgeoning pipeline driven by a transformed R&D engine, commercial excellence and discipline in M&A. 10% of 2026 EBIT will come from new launches that Intron estimates will sell €2.7bn by 2026. Despite this, SAN trades on just 11.2x 2023 EPS, a 30% discount to peers. TP €135 (45% upside).
Edition: 129
- 18 February, 2022
BioPharma R&D Supercycle
Healthcare
Using Intron’s extensive proprietary database of 617 drug approvals and the outcome of 404 P3 assets, they show concrete evidence that the rate of innovation across the BioPharma industry is accelerating. They believe it’s almost impossible that the sector isn’t making a supernormal ROI on R&D. Based on the burgeoning output of the industry Intron shows that EU Big Pharma still looks undervalued. Their top picks are Sanofi, AstraZeneca and Novo Nordisk.
Edition: 128
- 04 February, 2022
EU Pharma: The forgotten sector
Healthcare
Sector fundamentals have been materially enhanced since Covid struck with sales set to grow 5% CAGR 2021-26 and net income 7% CAGR. Moreover, drug output has been consistently high for most companies. This enhanced output has come due to a decade of investment which is now normalising and should allow margins to grow by 300bps over the next 5 years. Despite this, current share prices imply terminal growth rates are negative even as the background level of innovation is accelerating. Sanofi, AstraZeneca and Novo Nordisk are Intron’s top picks for the next 12 months.
Edition: 122
- 29 October, 2021
Overwhelming Valuation Case for Large Cap Pharma
Healthcare
Pharmaceutical stocks are significantly cheaper than Consumer Staples (which look expensive and vulnerable) and should form part of the defensive ends of portfolios - half of Willis Welby’s Pharma coverage comes in with implied to Y3 EBITM ratios that are less than 100 and these ratios exclude the imponderable benefit of new science and consequently numbers are MUCH MORE conservative. Top picks: GlaxoSmithKline, Sanofi, Roche and Novartis.
Edition: 117
- 20 August, 2021
Sanofi (SAN FP) France
Healthcare
Undervalued and underappreciated - SAN offers 6% CAGR sales growth and 11% EPS growth (2021-26) which is one of the fastest growing profiles in the sector yet trades at a 23% discount. Intron’s Buy thesis is predicated on the fact that they expect >700bps of group margin expansion to 2026 and profitability to soar driven by Dupixent (forecasts >€10bn sales) and ongoing strength in flu vaccines. TP €125 (45% upside).
Edition: 110
- 14 May, 2021