Sanofi Upgraded to Overweight by Morgan Stanley on Amlitelimab Outlook

Morgan Stanley has upgraded Sanofi (EPA:SASY) to “overweight” from “equal-weight,” lifting its price target to €100 per share following encouraging clarity on amlitelimab, the company’s OX40L antibody for atopic dermatitis.

While amlitelimab did not outperform blockbuster therapy Dupixent in efficacy, clinical trial data showed steady benefits on key measures such as EASI-75 and vIGA-AD. Analysts highlighted the drug’s advantages in dosing convenience and sustained effect, noting no plateau in efficacy after 24 weeks. This positions amlitelimab as a promising second-line option, with analysts estimating a peak revenue potential exceeding €2 billion. Further confirmation could come with long-term data from the ongoing OCEANA program, with the pivotal ESTUARY trial due in 2026.

The upgrade also reflects expectations of earnings growth momentum. Morgan Stanley forecasts Sanofi’s earnings to rise at an 8% compound annual rate from 2025 to 2028, outpacing peers projected at 7%. Operating margins are expected to expand to 29.6% in 2026, up from 29.1% in 2025, supported by stronger product sales, divestments, and royalties from Alnylam’s Amvuttra. Royalties from Amvuttra could peak at €1.8 billion, providing a significant, though potentially temporary, boost to operating profit.

Valuation was another key driver of the upgrade. Sanofi currently trades at about 10 times expected 2025 earnings, reflecting a 32% discount to large-cap European pharmaceutical peers. With amlitelimab progress reducing uncertainty, analysts view the current valuation as an attractive entry point for investors seeking exposure to reliable near-term earnings growth.

Morgan Stanley concluded that margin concerns appear overstated, and combined with robust sales and strategic positioning, Sanofi offers renewed appeal for investors targeting growth in the European pharmaceutical sector.