Citi has rolled out wide-ranging coverage of several leading European pharmaceutical groups, producing a mix of Buy and Neutral recommendations based on valuation metrics, pipeline strength and anticipated loss-of-exclusivity (LOE) events.
Analyst Graham Parry framed the bank's differential outlook around three core considerations - valuations, the depth of research and development pipelines, and the timing and magnitude of LOE events that will influence earnings trajectories into and beyond 2026.
GSK - Neutral; 1,900p target
Citi initiated coverage of GlaxoSmithKline at Neutral with a 1,900p price target. Parry noted that GSK's recent performance has shown improvement across a range of metrics. "Growth, margins, dividend policy, balance sheet and pipeline have all improved," he wrote, and these factors contributed to the stock gaining more than 45 percent in 2025.
Despite those gains, Parry warned that the medium term appears challenging. Citi projects a 27-30E EPS CAGR of 0 percent as GSK faces "significant LOEs in 26E-31E," with particular pressure expected across its roughly A37 billion HIV franchise. Parry expressed caution that forthcoming key launches and late-stage data "may not be enough to rerate the stock further."
Novo Nordisk - Neutral; DKK400 target
Novo Nordisk was also started at Neutral, with Citi assigning a DKK400 target. The bank cited a difficult outlook for 2026 driven by U.S. pricing reform, complications around reimbursement for obesity drugs and intensifying competition. Parry acknowledged the size of the obesity market opportunity but highlighted that "prices are eroding" and that competitive pressures create uncertainty for longer-term projections.
Sanofi - Neutral; EUR85 target
Sanofi was initiated at Neutral with a EUR85 price objective. Citi pointed to recent pipeline setbacks that have "weakened the long-term growth outlook" and described 2026 as likely "catalyst-light." Parry observed that while Sanofi has time to strengthen its pipeline through organic development or acquisitions over the next five years, the stock's current c.10x 26E price-to-earnings multiple already largely reflects those setbacks. He added that the market is unlikely to award a materially higher multiple without clear evidence of pipeline improvement.
AstraZeneca - Buy; 17,000p target
In contrast to the Neutral calls, AstraZeneca was rated Buy with a 17,000p target. Citi described AstraZeneca as "best-in-class," forecasting it to deliver the fastest mid-term EPS growth among European pharma names and citing what it called the "by far the best R&D pipeline in the sector."
Parry pointed to a heavy catalyst calendar in 2026, noting phase III readouts representing more than $30 billion in peak sales, or $17 billion on a risk-adjusted basis, as well as the anticipated launch of baxdrostat. Citi estimated baxdrostat could reach roughly $6 billion in peak potential in the resistant or uncontrolled hypertension market.
Novartis - Buy
Novartis received a Buy recommendation as well, with Parry highlighting expectations for "EPS outperformance," a robust catalyst schedule and potential valuation upside. He noted that, despite Novartis outperforming European pharma by 15 percent and the broader Stoxx600 by 5 percent in 2025, Citi sees room for continued outperformance and expects the company to sustain EPS upside.
Overall, Citi's initial coverage emphasizes a clear split within European pharma: a top tier led by AstraZeneca and Novartis where Citi sees durable R&D-led upside, and a group of large-cap peers where near- and mid-term earnings are constrained by pricing pressures, reimbursement challenges and upcoming LOE risks.