Sanofi jumps as Q1 key profit measure tops estimates; Citi reiterates Buy

Sanofi (NASDAQ: SNY) saw its shares jump 5% in premarket trading Thursday after the company posted better-than-expected business operating profit for the fiscal Q1.

The pharmaceutical company reported Q1 earnings per share (EPS) of EUR 1.78, surpassing the consensus estimate of EUR 0.93. Revenue for the quarter stood at EUR 10.46 billion, falling short of the consensus projection of EUR 11.47 billion.

The company’s business operating profit, a key measure that excludes exceptional items, decreased by 15% to EUR 2.84 billion ($3.04 billion), affected by rising costs. This figure was still higher than analysts' expectations of EUR 2.75 billion.

Looking forward, Sanofi reiterated expectations of a slight decline in its adjusted EPS for 2024, projecting a low single-digit percentage drop, which excludes the impact of currency fluctuations.

The company also noted that currency movements are expected to reduce its 2024 earnings by between 5.5% and 6.5% at current rates.

For the fiscal Q2 2024, Sanofi expects revenue of $3.2 billion, a sequential drop of 7.6%, plus or minus 350 basis points, while analysts were looking for $3.81 billion.

In the aftermath of the report, Citi analysts reiterated a Buy rating on SNY, saying the company has navigated its “toughest quarter of the year.”

“We see a high single digit revenue growth story for the remainder of the decade with further potential upside should the Dupixent IP estate delay biosimilars until 2034-40,” analysts wrote.

By Vahid Karaahmetovic

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