Stifel has identified Novo Nordisk (NYSE:NVO), Merck KGaA and Sandoz as top picks in the European pharmaceutical sector for the first quarter of 2024, according to its recent research note.
Novo Nordisk (NYSE:NVO) is highlighted for its exceptional growth outlook, with analysts anticipating over 20% growth in 2024, distinct from its big pharma peers.
Key drivers for this growth include the potential approval of a weekly insulin product and new data for semaglutide (Ozempic/Wegovy) in heart failure-preserved ejection fraction (HF-pEF), coupled with a capital markets day in March, the US investment bank said.
Merck KGaA, meanwhile, is expected to see a rebound across its three units in 2024. Despite the recent setback with Evo, which reduced its valuation by approximately €3 billion, Merck's performance in healthcare is now adequately priced in. Stifel estimates a significant €15 billion for mergers and acquisitions, primarily targeting the life sciences sector, which could catalyse growth.
At the same time, Sandoz is anticipated to exceed market expectations with its first full-year results and guidance for 2024. The upcoming year is pivotal for Sandoz, with significant biosimilar pipeline developments expected, including launches and regulatory decisions in the US and EU.
Reflecting on the fourth quarter of 2023, Stifel noted that both Straumann and ConvaTec Group PLC (LSE:CTEC) outperformed the market, driven by strong quarterly results and positive trading updates.