Top European Pharmaceutical Stocks to Watch According to BofA

Investing.com -- European pharmaceutical companies are positioning themselves for growth through innovative pipelines and strategic developments. Bank of America (BofA) has identified several standout performers in the sector that offer compelling investment opportunities. Here’s a closer look at their top picks in European pharmaceuticals.

BofA highlights companies with strong growth potential driven by promising pipelines, upcoming data readouts, and attractive valuations. These pharmaceutical leaders are navigating challenges while developing treatments that could significantly impact their future performance.

AstraZeneca (AZN): BofA maintains a Buy rating on AstraZeneca, citing its attractive valuation at approximately 16x 2026 P/E and potential for rerating to 18x. The firm expects high single-digit sales CAGR in the mid-term. The next 18 months will feature critical clinical readouts with combined sales potential of about $30 billion.

Key upcoming catalysts include AVANZAR in non-small cell lung cancer (first half 2026), SERENA-4 in metastatic breast cancer (second half 2026), and Eplontersen in ATTR-CM (second half 2026). BofA notes that despite investor hesitation around AVANZAR, consensus reflects limited peak sales expectations, creating a positive risk-reward profile.

In a recent development, AstraZeneca announced plans to invest $50 billion in the United States by 2030 for manufacturing and R&D. Additionally, Goldman Sachs reiterated its Conviction Buy rating on the company following the presentation of positive Phase 3 trial data for its baxdrostat treatment.

UCB: Earning a Buy rating from BofA, UCB’s growth story centers on Bimzelx, described as a unique growth asset in European pharmaceuticals. The drug is expected to drive approximately 23% EPS CAGR from 2026-2029, with patent protection until 2035 providing long-term growth visibility.

Bimzelx’s U.S. prescription rate is running at 3-4 times 2024 levels, showing strong momentum. BofA identifies two potential clearing events in the second half of 2025: Moonlake’s Phase III data in September (unlikely to show differentiation versus Bimzelx) and possible relief from MFN pricing risks. The firm also highlights increasing focus on UCB’s pipeline candidates Galvokimig and Donzakimig.

UCB also received a reiterated Buy rating from TD Cowen, which cited positive feedback from specialists and encouraging real-world efficacy data for its Bimzelx treatment.

Bayer: Recently upgraded to Buy, BofA sees three "binary" events with positive risk-reward potential. First, Asundexian data due in Q4, where BofA models approximately €3 billion in unrisk-adjusted peak sales versus limited consensus expectations.

Second, the Glyphosate SCOTUS review, with possible acceptance by September/October and a final decision by June 2026, could reduce Bayer’s €6 billion provision.

Third, the PCB Erickson review expected by mid-2026, where BofA’s additional €5 billion provision (beyond Bayer’s €6 billion) may prove conservative given recent settlements.

Goldman Sachs also maintained a Buy rating on Bayer and raised its price target on the company to EUR35.00 from EUR34.00.

Roche: BofA maintains a Buy rating on Roche, describing it as their "most contrarian" pick based on positive risk-reward in the Phase III pipeline. Key assets include giredestrant in breast cancer (Q4 data) and fenebrutinib in RRMS (Q1 2026).

The firm notes Roche has limited generic risk mid-term, with major patent expirations like Ocrevus not occurring until 2029, and even then potentially mitigated by new formulations.

Roche reported mixed results from late-stage trials for its experimental drug astegolimab, which is being developed to treat chronic obstructive pulmonary disease (COPD).

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