Sanofi SA ADR SNY

Sanofi Earnings: Lowered Long-Term Guidance Hits Stock, but Update Is In line With Our Fair Value

We are holding firm to our Sanofi fair value despite the stock's pullback, likely in reaction to lowered long-term margin guidance. In tandem with slightly lower-than-expected third-quarter results, Sanofi withdrew its 2025 operating margin target of 32%. While the market had largely expected the firm to hit the 2025 guidance, we were skeptical of the guidance and had forecasted more of a continuation of the current margin (close to 300 basis points below 32%) through 2025. We view the market pullback as overdone, making the stock more undervalued.