UBS Points to Two Top European Luxury Stocks Ahead of 2026 Upswing
Investing.com -- European pharmaceutical companies are positioned for strong growth through 2026, with several standout performers identified by Bank of America analysts.
These top picks feature promising pipelines, upcoming catalysts, and attractive valuations that could drive significant returns for investors.
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AstraZeneca leads Bank of America’s rankings, earning a Buy rating and placement on their "25 stocks for 2026" and Europe 1 list of top ideas. Trading at approximately 16x 2027 estimated P/E, analysts view AZN’s valuation as attractive with potential to rerate to around 19x. The company’s mid-term guidance suggests high single-digit sales CAGR.
The next 12 months will be pivotal with several major trial readouts including AVANZAR in NSCLC, SERENA-4 in metastatic breast cancer, and Eplontersen in ATTR-CM. Despite investor concerns about AVANZAR results, analysts see positive risk-reward potential as consensus reflects limited peak sales expectations.
In recent developments, AstraZeneca’s Chief Financial Officer stated that the company can absorb the financial impact of its U.S. drug pricing agreement in the coming year. The company’s shareholders also approved new articles of association to support the harmonization of its equity listing structure.
Novartis was upgraded to Buy, with a price objective of CHF117. The company faces patent cliffs for key products like Cosentyx (2029), Kesimpta and Kisqali (2031), but Bank of America believes its mid-to-late-stage pipeline will offset these challenges.
Successful launches including Pluvicto (peak $6.3bn), Scemblix (peak $3.7bn), and Leqvio (peak $2.5bn) provide momentum, with Rhapsido and ianalumab expected to add further growth. Seven Phase III readouts in 2026 could deliver total peak sales of $15.6bn ($7.5bn risk-adjusted).
Novartis announced a collaboration with Monte Rosa Therapeutics to develop molecular glue degraders for immune-mediated diseases, which includes a $120 million upfront payment to Monte Rosa. Following the news, Deutsche Bank reiterated its Buy rating on the company.
Sanofi maintains a Buy rating primarily based on valuation, trading at approximately 11x 2027 estimated P/E, which analysts believe undervalues its projected 13% 2027-2030 EPS CAGR. While the next 12 months offer fewer catalysts, amlitelimab data will be important.
Uncertainty remains around tolebrutinib’s SPMS approval following a PDUFA delay, though this represents only a 2-3% EPS impact.
Sanofi reported that its experimental drug amlitelimab met all primary endpoints in a Phase 3 trial for patients with eczema. Separately, the company’s Paris headquarters was searched as part of a French tax fraud investigation.
Genmab earns a Buy rating with three significant 2026 catalysts expected to provide visibility into EBIT growth following Darzalex loss of exclusivity. Bank of America has high conviction in positive readouts for Epkinly in 1L DLBCL ($2bn potential), Rina-S in 2L PROC ($1-2bn), and Peto in 1L H&NSCC ($2bn). These trials could validate mechanisms supporting additional pipeline opportunities worth over $5bn in peak sales.
Grifols rounds out the top five with a Buy rating despite a reduced price objective of €10.60. The company’s recovery from COVID headwinds and accounting concerns remains on track, with forecasted 2027-2030 sales CAGR of 7%, adjusted EBITDA of 11%, and EPS of 21%.
Trading at approximately 8x 2027 P/E, analysts believe Grifols could see multiple expansion as it builds a stronger track record of execution.
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