Morgan Stanley (NYSE:MS) expects the EU biopharma sector to offer a safe haven from weakening growth/higher real yields.
“Whilst we continue to favour growth/innovation narratives in biopharma over the long-term, we expect investors to reward earnings upgrade stories - Novo Nordisk, Novartis, AstraZeneca - in the near-term,” it said.
“Our top picks remain AstraZeneca in large-cap biopharma, Lonza in Life Sciences and Indivior and SOBI in mid-cap biopharma,” it said.
The investment bank rates AstraZeneca 'overweight' and has nudged its price target up to 12,900p from 12,700p.
It has also raised its price target on GSK (rated 'equal weight') to 1,585p from 1,440p to reflect a stronger-than-anticipated uptake of RSV vaccine Arexvy and positive FX movements.
In Europe, the bank upgraded Novartis to 'equal weight' from 'underweight'.