European Equity Strategy Pharma

UBS maintains an Overweight rating on European Pharma, viewing it as a resilient, high-quality defensive sector with improving earnings revisions. It serves as a compelling tactical alternative to AI-driven trades in the current market environment.

Key Takeaways

• 1.Maintain Overweight stance on European Pharma/Healthcare due to defensive quality, improving revisions, and lower valuation.
• 2.GLP-1 is the primary tactical catalyst; stock selection should focus on companies managing the patent cliff effectively.

Table of Contents

• Key takeaways
• Europe needs alpha, not beta
• Why Pharma lagged and why that now matters
• Equity Strategy
• GLP-1 is the strongest tactical catalyst
• The patent cliff is the structural debate
• Merck KGaA and Galderma are the cleaner structural longs
• AstraZeneca and Roche are the preferred large-cap catalyst names
• Where we are more cautious
• AI is structural, but its near-term value is operational
• China licensing helps, but geopolitics complicates it
• Consumerisation is the underappreciated strategic shift
• Valuation Method and Risk Statement
• Required Disclosures
• Company Disclosures
• UBS Global Research Disclaimer

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