Pharmaceutical and healthcare company Sanofi (NASDAQ:SNY) plunged in trading on Friday after announcing the spinoff of its consumer healthcare business. Sanofi expects to complete it by the fourth quarter of next year. The company stated in its press release, “Sanofi is reviewing potential separation scenarios, but believes that the most likely path would be through a capital markets transaction, by creating a listed entity headquartered in France.”
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The company also did away with its long-term target of achieving a 32% operating margin in 2025 “to support the full realization of its pipeline’s long-term potential, its continued investment around the new launches, as well as pricing headwinds in General Medicines.”
Sanofi reiterated its FY23 guidance and expects “mid-single digit” EPS at constant exchange rates. The company also expects FY24 adjusted earnings per share to decline by a “low-single-digit” percentage but anticipates a rebound in FY25.
In the third quarter, the company generated revenues of €11.96 billion, up by 3.2% year-over-year on a constant exchange rate basis. The company’s Q3 adjusted earnings declined by 2.1% year-over-year to €2.55 per share.
Is SNY Stock a Good Buy?
Sanofi stock has gone up by more than 11% year-to-date. Only one analyst has covered the stock in the past three months and is bullish with a Buy rating. The analyst has a SNY price target of $121.38, implying an upside potential of 127.6% at current levels.
