Sandoz : A unique position at the heart of healthcare systems under pressure

We are initiating coverage of Sandoz with a Neutral rating and a target price of CHF 57. It is now one of the world leaders in complex generics and biosimilars, having been spun off from Novartis in 2023. In its first full year of independence, it has demonstrated the strength of its model, with revenues topping $ 10bn in 2024. In a constrained macroeconomic and regulatory environment, its portfolio of ~1,300 generic and biosimilar products gives it a defensive profile (generics) boosted by momentum from biosimilars (core EPS growth of 16% over 2024-28). But the current valuation already largely reflects the operational improvement expected in the short term.