Shares of drug maker Sanofi (FR:SAN) are in the spotlight as investors seek answers to specific questions at the Investor Day scheduled for December 7. Investors are eagerly anticipating clarification on how much more Sanofi intends to spend on the research & development (R&D) of certain drugs and the related payoffs.
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All Eyes on Investor Day Insights
At the upcoming Investor Day, CEO Paul Hudson is set to address the audiences on how much the company aims to spend on experimental drugs and what their commercial success would look like. A failure to impress the masses could significantly impact Sanofi’s shares.
On October 27, when Sanofi released its Q3FY23 results, Hudson alarmed investors by withdrawing the margin forecasts for 2025. The CEO highlighted the need to spend on pipeline drugs related to immunology and inflammation and explained that sometimes, one needs to forgo short-term goals to meet long-term profitability. Sanofi shares plunged on the news and have remained under pressure since.
The drugs that are under investors’ and analysts’ radar include the multiple sclerosis drug frexalimab, the eczema drug amlitelimab, and a pneumococcal vaccine.
Interestingly, a Reuters report citing analysts noted that Sanofi’s R&D expenditure as a percentage of sales for Fiscal 2022 was noticeably below the sector average. And thus, it was acceptable to let go of short-term forecasts. Like every other pharmaceutical company, Sanofi needs to constantly research and launch newer drugs to capture a larger share of the market. Only time will tell if Hudson can win back investor confidence by giving a detailed breakup of expenses and justifying their need.
Is Sanofi a Good Stock to Buy?
Today, J.P. Morgan analyst Richard Vosser downgraded Sanofi stock to a Hold from Buy. Vosser set a price target of €92.00, implying 6.5% upside potential.
Overall, with eight Buys, five Holds, and one Sell rating, SAN stock has a Moderate Buy consensus rating. On TipRanks, the Sanofi share price forecast of €98.60 implies 14.5% upside potential from current levels. Year-to-date, Sanofi shares have lost 2.3%.
