SNYNF - Sanofi Q1: Wait And See For Now (Downgrade)

2024-05-01 14:27:40 ET

Summary

• Sanofi acquired Inbrx to add lung disorders to its treatment portfolio, with an estimated sales peak of €600 million by 2032.
• The company settled 4,000 lawsuits related to Zantac, which is not expected to impact its balance sheet significantly.
• Higher tax rate and R&D costs weigh Sanofi's EPS and target price. Therefore, we moved our rating to a neutral status.

Sanofi ( SNY ) ( SNYNF ) ( GCVRZ ) released its Q1 re sults update on April 25th . Here at the Lab, since 2022, our team has extensively covered the company, and following A Shift In Sanofi Equity Story , in November 2023-end, we decided to lower our internal estimates. Our buy rating was supported by Three Main Reasons : 1) a solid balance sheet, 2) a pipeline advancement, and 3) an attractive valuation. Since then, Sanofi's stock price has only gone up by 4.79%, confirming our status as a " show me story ." At that time, despite maintaining a buy rating, we lowered our 2024 EPS projection, reporting the following:

1. Limited pipeline catalysts until 2025;
2. Higher R&D costs;
3. A new spin-off in the consumer division;
4. No 2025 profitability targets.

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