Market Talk Roundup: Sanofi Shares Rise as New Strategy Sets Ambitious Targets
December 10 2019 - 8:03AM
Dow Jones News
The French pharmaceutical company has shared a new strategy
which outlines fresh targets and forcasts under its recently
appointed CEO Paul Hudson. Below is a selection of comments.
0634 GMT - Sanofi's new strategy should draw positive market
reactions, Citi analysts say. The French pharmaceutical company's
new mid-term margin target of 32% suggests at least 15% upside to
consensus expectations, Citi says. Commentary around the potential
monetization of the consumer unit, which could potentially be worth
EUR26 billion to EUR32 billion according to Citi, will also be
taken well and highlights the company's significant balance sheet
flexibility, the bank says. (cristina.roca@dowjones.com)
0954 GMT - Sanofi shares are buoyant on Tuesday morning after
the company shared new chief executive Paul Hudson's fresh
strategy. It set ambitious margin targets, gave a bullish forecast
for its star drug Dupixent and said it would give up on hunting for
new drugs in the challenging areas of diabetes and cardiovascular
medicine. It also hinted at a possible separation of its consumer
healthcare business with plans to make it a standalone unit within
Sanofi. Shares in the company are up 4.6% at EUR 85.60.
(denise.roland@wsj.com ; @deniseroland)
1049 GMT - French pharmaceutical company Sanofi is looking to
exceed consensus expectations under the new targets unveiled by its
recently-arrived chief executive Paul Hudson, say analysts at Bank
of America Merrill Lynch. They say that the targets on sales,
margins and savings imply a 2025 earnings per share more than 10%
higher than the bank's estimates. De-emphasis on the diabetes and
cardiovascular portfolio, a possible divestment of the Regeneron
stake, as well as greater independence for the consumer unit all
provide further positive momentum, BAML adds.
(carlo.martuscelli@wsj.com; @carlomartu)
1059 GMT - The decision to make Sanofi's Consumer Healthcare
unit a standalone business within the organization implies the
division is being prepared for an exit from the company, Bryan
Garnier's Jean-Jacques Le Fur says. The bank values the business at
close to EUR25 billion, five times estimated 2020 sales. Le Fur
says that the targets set out by new CEO Paul Hudson are ambitious,
aiming for a 2022 operating margin of 30%, which is above the
bank's 28.5% forecast. Shares rise 13% to EUR85.72.
(carlo.martu@wsj.com; @carlomartu)
1134 GMT - French pharmaceutical company Sanofi has set itself
an aggressive, EUR10 billion peak sales target for Dupixent, an
injected treatment for eczema and asthma, says UBS, noting that the
figure is well above consensus forecasts of EUR7.1 billion in 2026.
"This is exciting but sets the bar high and we expect investors
will want to understand how this breaks down and when it might be
reached," says the bank. "Other assets are identified as
priorities, although some (fitusiran, BIVV001, venglustat) have
already been scrutinised and we expect the focus to be on what
might emerge from the proposed acquisition of Synthorx (focussed on
immuno-oncology) for $2.5 [billion], announced earlier yesterday."
Shares trade 13% higher. (carlo.martuscelli@wsj.com;
@carlomartu)
(END) Dow Jones Newswires
December 10, 2019 07:48 ET (12:48 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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