Sanofi: Arguably One Of The Most Undervalued Pharma Stocks

Jul. 29, 2022 1:31 AM ETSanofi (SNY), SNYNF4 Comments
Cavenagh Research profile picture
Cavenagh Research
3.78K Followers

Summary

  • Sanofi is a leading phrama company, with strong capabilities in research and innovation.
  • Sanofi’s financials look very attractive. In 2021, the company generated $46.3 billion of revenues and $7.8 billion of net income.
  • In this article, I argue that Sanofi is strongly undervalued as compared to both the company’s financials and competitors (EU pharma peers).
  • Based on a residual earnings valuation model, I see more than 50% upside.
  • I initiate with a buy recommendation and set a $77.11/share target price.

Sanofi Distribution Centre in Kirkland, Quebec, Canada.

JHVEPhoto

Thesis

I am bullish on Sanofi (NASDAQ:SNY) as I see the company undervalued as compared to both the company’s financials and competitors (EU pharma peers). Valued at an estimated 2023 P/E of below x13, the market prices Sanofi like a

Sanofi Valuation

Seeking Alpha

Sanofi Valuation Residual Earnings

Analyst Consensus Estimates; Author's Calculation

Sensitivity Table Sanofi Valuation

Analyst Consensus Estimates; Author's Calculation

This article was written by

Cavenagh Research profile picture
3.78K Followers
5y experience as an investment analyst for a major BB-Bank. Currently working towards the CFA charter. Passion for risk-assets (Growth, Contrarian, Emerging Market) ex-colleague and close friend of Investor Express

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Not financial advice.

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