Citi has updated its outlook on Sanofi (SAN: FP) (NASDAQ: NASDAQ:SNY), increasing the price target from EUR125.00 to EUR130.00.
The firm sustained its Buy rating on the pharmaceutical company's shares. The adjustment comes as the analyst highlights the European Pharma sector's growth potential, noting that it is expected to see a 5/8% compound annual growth rate (CAGR) in sales and earnings per share (EPS) from 2024 to 2029. Sanofi, in particular, is trading at a 20% discount despite forecasting a superior 8/15% CAGR.
According to the analysis, scenario assessments that vary Dupixent's longevity and sales, as well as pipeline and flu vaccine projections, suggest a highly favorable risk-reward ratio for Sanofi, with potential price ranges from EUR87 to EUR185.
The company has provided peak sales guidance for its core 12 pipeline assets, estimating a range of EUR30-60 billion. Citi's base and bull-case scenarios are more conservative, estimating just EUR15-20 billion, yet still surpassing the consensus of EUR10 billion.
Citi's report also emphasizes the recent positive data for tolebrutinib, which has led to a significant upward revision of its peak sales forecast, now 300% higher at EUR2.6 billion compared to the consensus of EUR1.4 billion. This, according to the firm, is a clear sign of improvement in Sanofi's research and development productivity.
The analysis further points to several of Sanofi's Phase III assets, including itepekimab for COPD, amlitelimab for AD/asthma, and frexalimab for MS/T1DM, which are purportedly not receiving the recognition they deserve. Moreover, the durability, sales potential, and profitability of the Dupixent franchise, along with the anticipated EUR1-3 billion royalty stream from Amvuttra, are also noted as underappreciated factors. Citi's updated forecasts place it 16/36% ahead of the 2030 consensus for sales and EBIT/EPS.
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