2Q26 Thoughts and Feedback from the Road

Research evidence excerpt

2Q26 Thoughts and Feedback from the Road

RBC Capital Markets, LLC

Trung Huynh (Analyst)

(415) 212-0012,

trung.huynh@rbccm.com

Justin Burns, CFA (Vice

President)

(415) 445-8668,

justin.burns@rbccm.com

July 1, 2026

2Q26 Thoughts and Feedback from the RoadRESEARCH Positive momentum building into 2H with constructive setup ahead

Our view: Over the past month, we attended conferences and marketing meetings across the US;

including New York City, Chicago, New Orleans, and the Southeast. Sentiment on the US Pharma sector

has turned increasingly positive versus 1Q with a meaningful uptick in generalist attention. While macro

uncertainty (FDA/Trump/MFN) remains top of mind, the value vs growth Pharma trade that weighed

on 1H has largely run its course. Heading into 2H, most investors we met with see Pharma as the best

positioned Healthcare subsector if tech corrects, a view reflected in Large Cap Pharma's recent rally.

After a tough first half, attractive valuations, solid fundamentals, and potentially stronger 2H catalystsEQUITY

are driving more constructive investor dialogue. The biggest sentiment shifts have been in LLY and ABBV.

Despite valuations at all-time highs and some lingering hedge fund pessimism in both names, most

investors we spoke to are increasingly optimistic on fundamentals. The narrative on other key US Pharma

names remains largely unchanged: MRK is well-liked, but risk-reward on near-term catalysts could skew

to the downside; BMY is unlikely to gain traction until its main catalysts at YE26; and PFE positioning

remains negative despite the stock trading near 5Y lows.

LLY (Outperform; PT $1,250): Sentiment turns decidedly positive

Sentiment: Positive

Key Takeaways:

• Reta data impresses, but debate centers on how broad adoption goes beyond BMI 35+.