HSBC has revised its price target for Sanofi (SNY, Financial), lowering it from EUR 130 to EUR 115, while maintaining a Buy rating on the stock. This adjustment is in response to potential financial pressures Sanofi could face due to recent developments. The biopharmaceutical company is encountering several challenges, including the looming threat of new U.S. tariffs, a significant patent cliff, and obstacles posed by the Part D/Inflation Reduction Act.
The financial analysis indicates that if a 25% U.S. tariff is implemented, Sanofi's innovative pharma segment might experience earnings headwinds ranging from 6% to 14%. Moreover, HSBC's scrutiny suggests that the company's earnings could also be influenced by other factors such as tax rates, which might play a role depending on how the tariffs are structured. Investors were informed of these potential risks and their implications through a detailed research note.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for Sanofi SA (SNY, Financial) is $64.12 with a high estimate of $69.00 and a low estimate of $56.00. The average target implies an upside of 22.56% from the current price of $52.32. More detailed estimate data can be found on the Sanofi SA (SNY) Forecast page.
Based on the consensus recommendation from 7 brokerage firms, Sanofi SA's (SNY, Financial) average brokerage recommendation is currently 1.9, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Sanofi SA (SNY, Financial) in one year is $60.78, suggesting a upside of 16.17% from the current price of $52.32. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Sanofi SA (SNY) Summary page.
SNY Key Business Developments
Release Date: January 30, 2025
- Q4 Net Sales: Increased by 10.3% at constant exchange rates to EUR10.6 billion.
- Full Year Net Sales: Increased by 11.3% at constant exchange rates to EUR41.1 billion.
- Gross Margin: 74.3% in Q4; 75.7% for the full year.
- Business EPS: EUR1.31 in Q4; EUR7.12 for the full year, a 4.1% increase at constant exchange rates.
- Dupixent Sales: Exceeded EUR13 billion, with a 16% growth in Q4.
- Vaccines Sales: Crossed EUR8 billion, up by 13.5% for 2024.
- R&D Expenses: Increased by 14.6% at constant exchange rates to EUR7.4 billion.
- SG&A Expenses: Increased by 4.5%.
- Free Cash Flow: EUR6 billion, impacted by several one-offs.
- Net Debt to EBITDA Ratio: 0.7 times at the end of 2024.
- Proposed Dividend: EUR3.92 per share for 2024.
- Share Buyback Program: EUR5 billion planned for 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sanofi SA (SNY, Financial) achieved double-digit sales growth for the third consecutive quarter, driven by new product launches and strong performance from Dupixent.
- Beyfortus reached blockbuster status in its first full year of sales, contributing significantly to the company's growth.
- The company's vaccines business crossed the EUR8 billion milestone, marking a 13.5% increase, driven by Beyfortus and a resilient flu franchise.
- Sanofi SA (SNY) improved its ranking in the Access to Medicine Index from 8th to 3rd place, highlighting its commitment to global health.
- The company plans to execute a EUR5 billion share buyback program in 2025, reflecting confidence in its future and commitment to shareholder value.
Negative Points
- Gross margin decreased slightly due to the absence of COVID revenues in 2024 and the impact of the Obaggio LOE.
- Business EPS growth was modest at 4.1%, impacted by a lower gross margin and increased R&D expenses.
- The introduction of changes to Medicare Part D under the IRA is expected to create modest headwinds.
- Free cash flow was impacted by price cuts of Lantus in the US, elimination of factoring of receivables, and unfavorable exchange rate impacts.
- The company's net debt increased slightly at the end of 2024 due to strategic investments and dividend payouts.
