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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.