Pharma, biotech to keep quality high in 2023 - JPM
03/01/2023 11:11
** J.P.Morgan expects European pharmaceutical &
biotechnology sector to maintain its elevated premium, at least
during the period of recessionary concerns
** Quality is to stay "in fashion" in 2023, the broker says,
seeing limited downside to sector forecasts, and stronger growth
relative to the wider market
** It continues to favour companies with sustainably higher
growth, and far more pipeline data points/new launches to drive
upgrades
** JPM's top picks are Novo Nordisk NOVOb.CO , AstraZeneca
AZN.L , Merck MRCG.DE among large caps; Argenx ARGX.BR ,
Sartorius SATG.DE among mid caps; Euroapi EAPI.PA among
small caps
** The broker upgrades Hikma Pharmaceuticals HIK.L to
"overweight" from "neutral", seeing "a re-rating story" over the
next 18 months
** The market better appreciates the company's strong growth
prospects for the injectables and branded divisions, generics
pricing improves, and new CEO clarity is achieved, JPM says
** It raises Recordati RECI.MI to "overweight" from
"neutral" citing bolt-on M&A accretion and upgrades prospect on
issuance of long-term targets
** JPM ups Novartis NOVN.S to "neutral" from "underweight"
seeing potential for pipeline upgrades in 2023
** It downgrades H. Lundbeck LUNb.CO to "neutral" from
"overweight" on lack of clarity on pipeline rebuild strategy
** The broker cuts Bayer BAYGn.DE to "neutral" from
"overweight," seeing limited catalysts until 2025, with 2023
being "a much more muted year"
** JPM says it avoids companies like GSK GSK.L , Roche
ROG.S , with downside to 2023 EPS consensus and with
potentially challenged 2025-2030 outlooks, and slashes both to
"underweight" from "neutral"
** It cuts MorphoSys MORG.DE to "underweight" from
"neutral" given significant downgrades regarding cancer
immunotherapy treatment Monjuvi, and no substantial 2023
pipeline newsflow
(Reporting by Marta Frackowiak)
((marta.frackowiak@thomsonreuters.com))