Jefferies cuts Sandoz to “hold,” citing limited upside after share rally

Published 08/08/2025, 12:18
© Reuters.

Investing.com -- Jefferies has downgraded Sandoz Group AG (SIX:SDZ) to “hold” from “buy,” citing limited upside after the company’s recent share price rally, in a note dated Friday. 

The decision follows a first-half performance that delivered a 6% adjusted EBITDA beat and maintained full-year guidance, but the analysts judged the subsequent 12% share price jump as excessive.

They noted that the absence of updates on the Tyruko JCV assay weighed on sentiment, and while biosimilars growth excluding Cimerli remained strong, the potential for further upgrades to consensus estimates and guidance appeared limited.

The analysts raised Sandoz’s 2025 earnings per share estimate by 3% to 4% and increased their price target by 11% to CHF 47.60, but said keeping a “buy” rating would require valuing the company at 12.4 times 2026 EV/EBITDA, a level they considered unjustifiable on fundamentals. 

They pointed out that the market is now pricing in a medium-term top-line upgrade at the low end of Sandoz’s margin target range, shifting the investment balance to the downside.

Sandoz shares have risen 35% year to date, materially outperforming sector peer Hikma Pharmaceuticals (OTC:HKMPY). 

The analysts argued that the rally is unsustainable given tariff uncertainties, biosimilars pricing pressure, and potential costs linked to the Urban Waste Water Directive. 

While the analysts acknowledged Sandoz’s long-term value potential and deep biosimilars pipeline, they stressed that the shares are “priced to perfection” and any execution misstep could undermine the valuation.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.