Goldman Sachs initiated coverage of six European pharmaceutical stocks on Thursday, stating that "innovation is the key to success."
The bank started coverage of AstraZeneca (NASDAQ:AZN), Novo Nordisk (NYSE:NVO) and Novartis (NVS) with Buy ratings. Meanwhile, GSK (GSK) and Bayer AG (OTC:BAYRY) were given Neutral ratings and Roche (RHHBY (OTC:RHHBY)) was initiated with a Sell rating.
"We like Astra's best-in-class pipeline and solid margin progression," said analysts at Goldman Sachs. "For Novo, we see upside driven by de-risking of pipeline opportunities in obesity (initial CagriSema Phase 3 data in 2H24), continued strong delivery of earnings, as the company cements its place in the c.$130bn obesity market, as well as flexibility around capital deployment and shareholder returns."
They add: "Our Buy on Novartis centres on a narrative of continued strong execution (which we see driving upside to near-term consensus earnings) rolling into a catalyst-rich period from 2H25."
For GSK and Bayer, the firm said they do not believe the innovation catalyst path or earnings momentum warrant being more negative yet.
For Roche, the bank sees continued negative earnings momentum and limited key innovation catalysts through the end of 2024. In addition, through the remainder of 2024, they see limited upside potential from clinical newsflow.
"To turn more positive, we would need to see a bottoming of consensus mid-term forecasts, ahead of a potentially stronger innovation catalyst path in 2025," wrote analysts at Goldman.