Sandoz AG: Q2/H1'26 Preview: we est 7% Q2 LC Sales, +1.5% vs. cons, albeit EBITDA margin more H2 weighted

Research evidence excerpt

Sandoz AG: Q2/H1'26 Preview: we est 7% Q2 LC Sales, +1.5% vs. cons, albeit EBITDA margin more H2 weighted

Barclays | Sandoz AG

FY26 BBG consensus is in line with existing guidance, and we don't see a material change

required on the back of the update, although there may be somewhat increased

confidence in FY26 guidance delivery, assuming our forecast for a significant sequential

top-line acceleration materialises.

Overall: We expect the Q2/H1 update to be reassuring on the company's ability to deliver on

FY26 top-line guidance, given we see a material (c.4pp) sequential top-line acceleration in Q2,

after a slower start at Q1. Should the company deliver on our c.7% LC top-line growth in Q2,

c.1.5pp ahead of consensus, this should be positively received. That said, we see Core EBITDA

margin slightly more H2 weighted than consensus currently reflects, hence our forecast on H1

EBITDA is 1% lighter, which is slightly more cautious. Post Q2/H1, we expect a focus on the Sep

22nd CMD, where we believe the company could roll out guidance until at least 2030, capturing

more of the "Golden Decade" of Biosimilars. We believe SDZ could guide for ~ MSD top-line

growth in 2027/28, before acceleration from Biosimilar launches starts in 2029.

Valuation: We value SDZ at c. 22.0x '27E EPS, equating to SFr 81.0/ sh (prev. 21x), reflecting the

fact we now forecast a 13% '27-31 EPS CAGR (prev. 12%) and given the recent re-rating of the EU

Specialty sub-sector. Shares have already outperformed over the last month (+12% vs. SXDP

+2%), but we see strong top-line performance at Q2 and investor interest in the upcoming CMD

providing further support.

SDZ.S: Financial and Valuation Metrics EPS (USD)

FY Dec 2024 2025 2026 2027 2028

EPS 2.73A 3.68A 4.08E 4.60E 5.19E