The healthcare sector outperformed in Europe, India and China last month, according to Citi, which named its top picks worldwide. Europe’s pharma sector looks particularly strong, the bank said in a May 4 note, with European large caps seeing consensus earnings upgrades in April and positive earnings-per-share momentum for 2023. The picture isn’t quite so rosy for the U.S., according to the Citi, with healthcare underperforming the market in the country last month. Nevertheless, the investment bank named a slew of buy-rated top picks across the U.S., Europe and Asia. U.S. biotech Amylyx Pharmaceuticals , Beam Therapeutics Citi said in a May 12 note that Amylyx had a solid first quarter, with sales higher than expectations for its Relyvrio drug, a treatment for the neurological disease ALS. The bank noted that it has another treatment for ALS – AMX0035 – that was recently approved by multiple regulatory authorities. “There is a significant unmet need in ALS, as approved drugs have shown a benefit on either function or survival, but not both. In the US and Canada, we expect initial commercial demand to be strong, driving upside to shares into initial launch numbers in 2023,” said Citi analysts. It gave Amylyx a price target of $53, giving it upside of around 88% from current levels. Citi says patient demand for gene therapies company Beam had been “encouraging” and its pipeline programs remain on track. “We continue to view BEAM as a long-term value play and anticipate several value inflection points beginning in 2024,” Citi analysts wrote. It gave Beam a price target of $60, implying upside of around 67%. Europe pharmaceuticals Novo Nordisk Novo Nordisk continues to offer materially higher growth and returns – more than three times its peers, according to Citi. Novo is trading on a price-to-earnings multiple of 26 times, versus the sector’s 16. “We view the implied 100% premium as justified given the absolute revenue opportunity on offer and fact Novo is offering a 5x stronger revenue growth outlook this decade and a [return on invested capital] that is > 3x higher than peers,” Citi analysts wrote. It gave Novo a price target of 1,200 Danish Krone ($175), or 3% upside. Other European picks from Citi include Swiss healthcare company Roche and British pharma and biotech firm AstraZeneca . Asia stocks In Asia, Citi named Japanese pharmaceutical company Daiichi Sankyo , South Korean biotech firm Samsung Biologics and China’s Wuxi Biologics as top picks.
