uploads/2018/02/Chart-08-3-1.jpg

Sanofi’s Valuations in February 2018

By

Updated

Sanofi’s valuations

Sanofi (SNY) reported revenues of ~8.7 billion euros in 4Q17, a decline of ~2.0% in revenues compared to ~8.9 billion euros in 4Q16. The decline in revenues was driven by an ~6.1% negative impact of foreign exchange, substantially offset by 4.1% growth in revenues at constant exchange rates. 

Sanofi reported earnings per share (or EPS) of 1.06 euros in 4Q17. The chart below compares Sanofi’s revenues and EPS trend since 1Q16.

Article continues below advertisement

Forward PE multiple

PE (price-to-earnings) multiples are widely available and represent what one share can buy for an equity investor. On February 26, 2018, Sanofi was trading at a forward PE multiple of ~12.0x compared with the industry average of 13.4x. 

Among Sanofi’s competitors, Pfizer (PFE) and Novartis (NVS) are trading at higher forward PE multiples of 12.1x and 15.5x, respectively. Allergan (AGN) is trading at a lower PE multiple of 10.1x.

Forward EV-to-EBITDA multiple

On a capital structure–neutral basis, Sanofi was trading at a forward EV-to-EBITDA[1. enterprise value to earnings before interest, tax, depreciation, and amortization] multiple of 8.5x on February 26, 2018, which is lower than the industry average of ~10.8x. 

Among Sanofi’s competitors, Pfizer (PFE), Novartis (NVS), and Allergan (AGN) are trading at higher forward EV-to-EBITDA multiples of 10.5x, 13.6x, and 10.9x, respectively, compared to Sanofi.

The VanEck Vectors Pharmaceutical ETF (PPH) holds 4.3% of its total investments in Sanofi ADR (SNY). PPH also holds 4.8% in Pfizer (PFE) and 4.8% in Novartis AG ADR (NVS).

Advertisement

More From Market Realist