Bank of America Securities reduced its recommendation on Sanofi (NASDAQ:SNY) from Buy to Neutral on Thursday and lowered the firm's price target to $54.50 from $59.16. The research note links the change to heightened investor caution as the company enters an executive transition and a phase the analyst termed "another period of rebuild and transition."
The downgrade coincides with Sanofi's recently announced leadership change. Paul Hudson is scheduled to leave the company on February 17, and Belén Garijo, the former chief executive of Merck KGaA, has been named his successor.
In the BofA report, analyst Graham Perry pointed to investor nervousness around the switch in management and a limited set of pipeline catalysts anticipated in 2026. The firm expressed reservations about Garijo's record at Merck KGaA, summarizing its view as "no transformational deal and questionable R&D progress," and citing high-profile program failures including evobrutinib and xevinapant, along with concerns tied to the SWTX transaction.
To reflect what it describes as increased uncertainty over Sanofi's outlook, BofA cut the multiple it applies to the company's forward earnings. The new price objective implies a target price-to-earnings multiple of roughly 10x 2027 earnings, down from the prior 12x.
Market-data referenced alongside the note indicates Sanofi trades at a low PEG ratio of 0.46, a value that suggests the stock could be inexpensive relative to its growth expectations under some valuation measures.
Separately, Sanofi reported fourth-quarter 2025 financial results that contained a mixed signal for investors. The company posted earnings per share of €1.53, well above the consensus forecast of €0.84, marking an 82.14% surprise. Revenue for the quarter came in at €11.3 billion, missing the expected €13.58 billion.
The combination of a pronounced EPS beat and a revenue shortfall underscores the complexity of the company's recent performance and has drawn close attention from analysts and investors assessing Sanofi's position in the pharmaceutical sector. These financial outcomes, alongside the leadership change and the questions flagged by BofA, are central to the current debate over the company's near-term trajectory.
Context for readers: The developments described above have implications for stakeholder assessments of Sanofi's strategy and execution, but they also highlight differences between profit metrics and top-line trends in the most recent quarter.