Investing.com -- Citi has initiated coverage of the “Big 6” European pharmaceutical groups with a positive sector view, rating AstraZeneca (LON:AZN), Novartis AG (SIX:NOVN) and Roche (SIX:ROG) at Buy while assigning Neutral ratings to GSK (LON:GSK), Sanofi (EPA:SASY) and Novo Nordisk (CSE:NOVOb).
AstraZeneca and Novartis are the Wall Street bank’s top picks.
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Citi expects the industry to remain a growth sector, driven by innovation and an unusually full late-stage pipeline. It forecasts average earnings per share (EPS) growth of 7% in 2026 and an 8% compound rate through 2030, driven by new product launches that are largely offsetting patent expiries.
"Despite its increasing revenue base and pricing and access headwinds, demand for new innovative products that improve patient outcomes and address unmet medical needs continues," Citi analysts led by Graham Parry said in a note. "We see the sector continue to drive growth with new launches mostly able to offset loss of patent protection."
The sector’s combined late-stage pipeline carries $167 billion in risk-adjusted peak sales potential — well above the roughly $93 billion of revenue Citi models as lost to loss of exclusivity by 2034.
The analysts also flagged 2026 as a catalyst-heavy year, particularly for AstraZeneca and Novartis, with a large number of Phase III data readouts across major disease areas.
At the same time, policy risks have eased after most favored nation (MFN) pricing agreements with the U.S. administration late last year, which the analysts said have reduced tariff and drug pricing uncertainty for most companies.
Among the Buy-rated stocks, Citi views AstraZeneca as the strongest long-term growth story, supported by what analysts see as “ by far the best R&D pipeline in the sector,” alongside a heavy flow of late-stage trial results with more than $30 billion in unadjusted peak sales potential.
Novartis is described as a "serial earnings outperformer," with Citi expecting the company to beat consensus sales growth as both approved products and late-stage assets gain traction.
"We expect Novartis to achieve its 4-5% 25-30E sales guidance, beating consensus 3.5-4.0% and seeing our 30E forecasts 7-8% above consensus," the analysts said.
Roche’s Buy rating is anchored in an improving pipeline, led by giredestrant in breast cancer and fenebrutinib in multiple sclerosis, as well as "8 new PIII starts with $23bn peak sales potential."
On the Neutral side, Citi said GSK’s operational improvement and new launches are being overshadowed by a significant loss of exclusivity in its HIV franchise later in the decade.
For Sanofi, analysts said the stock’s valuation already reflects a series of pipeline setbacks over the past year, while Novo Nordisk faces multiple near-term headwinds around pricing, access and competition, despite early strength in prescriptions for its oral Wegovy launch.
