Trading Idea: Sanofi (SAN-FR)

We had an Exit Long Strategic signal on October 21, 2020, triggered by our system on SAN-FR, Sanofi, the French Big Pharma.

Our system triggered an Enter Short Tactical signal on September 6, 2021, that imply a likely drop acceleration. Sanofi looks like a serial underperformer, as the Sell signal is combined with a poor behavorial score of 1/10. In Europe, the % stock participation of Strategic Signal into the Pharma sector is 57% but only 14% in Tactical signal. That implies that the momentum is weak short term, but positive mid term. According to our Methodology, we should focus only on the more solid stocks and/or when possible a combination of Tactical & Strategic signals.

Sanofi is a € 103.4 Bn market cap and one of the Major Europan « Big Pharmas ». Its three operating segments are : Pharmaceuticals, Consumer Healthcare (CHC), and Vaccines. The Pharmaceuticals includes: Immunology, Multiple Sclerosis / Neurology, Oncology, Rare Diseases, Rare Blood Disorders, Cardiovascular, Diabetes, Established Prescription Products. The Vaccines segment comprises Sanofi Pasteur, together with R&D and production activities dedicated to vaccines. The CHC segment comprises the commercial operations for Sanofi’s Consumer Healthcare products. The Company’s products developed in collaboration or franchise include Dupixent, Aubagio, Lemtrada, Cerezyme, Lumizyme, Jevtana, Fabrazyme, among others.

Sanofi appears on track to develop one or more anti-Covid vaccines in the next quarters. However, an excess in authorized vaccines remain possible, especially if the outbreak receeding is confirmed.

More structurally the main issue with Sanofi is linked to its slow reorganization. A large part of Sanofi’s business is not growing and is more and more a concern, the Company should spinn-of or restructure these segments. The growing businesses are Vaccines and Specialty care, while General Medecines and Consumer Healthcare are struggling to maintain a flat activity.

Short term catalyst: Covid-19 vaccines, pandemic momentum.

This signal looks mainly Company Specific.