Germany stocks higher at close of trade; DAX up 0.85%

Investing.com -- European pharmaceutical stocks present varied opportunities according to Morgan Stanley’s latest analysis, with clear leaders emerging based on growth prospects, pipeline strength, and valuation metrics.

Morgan Stanley has identified several standout performers in the European pharmaceutical sector, highlighting companies with compelling growth trajectories and addressing key challenges facing others. Their analysis points to significant differentiation among major players.

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AstraZeneca Morgan Stanley views AstraZeneca as offering sector-leading earnings growth of 11% over FY’26-29, compared to 6% for peers. Their optimistic assessment of AstraZeneca’s pipeline suggests longer-term earnings potential exceeding current market expectations. The firm believes AstraZeneca’s 2026 guidance will likely reassure investors, with projected mid-single-digit sales growth and low double-digit EPS growth. Potential upside catalysts include Brinsupri royalties (over $1 billion to profit), faster Datroway rollout, and Calquence in finite CLL (approximately $1 billion peak sales). While acknowledging a challenging first half of 2026, Morgan Stanley sees a more attractive risk-reward profile emerging in the second half.

AstraZeneca announced that its new drug application for baxdrostat, a treatment for hard-to-control hypertension, has been accepted for priority review by the U.S. Food and Drug Administration (FDA). A decision on the application is expected in the second quarter of 2026.

Sanofi Sanofi continues to offer "growth at a reasonable price" according to Morgan Stanley. The firm notes a shift in focus from R&D execution to the company’s undemanding valuation relative to its strong earnings growth projection of 11% from 2026-29. Morgan Stanley expects Sanofi to guide conservatively for 2026, with mid-to-high single-digit sales growth and high single-digit EPS growth. Their forecast shows 7% year-over-year sales growth and 12% earnings growth for FY’26, with potential upside if anticipated tariff headwinds don’t materialize. Despite recent share price rebounds, the valuation remains attractive given the EPS momentum.

In recent developments, Sanofi reported that its Phase III trial for the atopic dermatitis treatment amlitelimab met its endpoints, but efficacy measures fell below some analyst expectations. Separately, the company’s Paris headquarters was searched as part of a French tax fraud investigation.

Bayer Morgan Stanley has upgraded Bayer to Overweight following the solicitor general’s recommendation to the Supreme Court to review the Durnell case in the glyphosate litigation. They see potential upside through further litigation de-risking in 2026, beginning with the Supreme Court’s decision on whether to accept the case, expected in January 2026. The firm also notes improving fundamentals with upside potential in Bayer’s Pharma business driven by momentum from Nubeqa and Kerendia. After earnings revisions stabilized in late 2024, Morgan Stanley anticipates positive revisions in 2026.

Bayer’s menopause drug, Lynkuet, received a recommendation for approval from the European Medicines Agency (EMA), moving it closer to market access in the EU. The company is also set to receive a €180 million sales-based milestone payment from its partner Orion for the drug Nubeqa.

GSK Despite recent rallies supported by a new CEO, stronger near-term earnings momentum, and attractive valuation, Morgan Stanley maintains an Underweight rating on GSK. While strong specialty medicines and improved product mix underpin FY’26 estimates of 5% sales growth and 7% operating profit growth, the firm identifies longer-term headwinds that could present mid-single-digit percentage downside risk to earnings. Their longer-term sales forecast sits below GSK’s guidance, projecting approximately £35 billion in FY’31 sales versus GSK’s guidance of over £40 billion.

GSK received U.S. Food and Drug Administration (FDA) approval for its multiple myeloma treatment Blenrep to return to the market, though with some restrictions. The company also announced it would discontinue studies of latozinemab for frontotemporal dementia after a clinical trial did not show a benefit on its clinical endpoint.

Roche Morgan Stanley expresses caution about Roche despite recent success for giredestrant in adjuvant breast cancer. They note the trial design suggests lidERA may only target approximately 20% of the early breast cancer population. The firm forecasts giredestrant peak sales of about $7 billion across adjuvant and metastatic disease but sees risk-reward skewed negatively ahead of upcoming data presentations. Trading at 15x FY’26 P/E (6% premium to peers) despite offering softer earnings growth over 2026-29 compared to peers (4% vs 8%), Morgan Stanley believes continued delivery is required to sustain momentum.

Analysts at Jefferies recently downgraded Roche to Underperform from Hold, citing concerns that the company’s valuation is at a premium compared to peers without sufficient growth prospects to justify it.

Novartis Morgan Stanley looks beyond Novartis’s unattractive short-term outlook (2% sales/0% EBIT growth in 2026), focusing instead on accelerating growth from H2’26 and projected 6% sales/8% EBIT CAGR for 2026-2029. They see upside potential from the Rhapsido (remibrutinib) launch in CSU in 2026, illustrating the drug’s potential exceeding $5 billion across indications. While acknowledging concerns about patent expirations from 2031, Morgan Stanley believes Novartis can overcome these challenges through business development and pipeline delivery.

Novartis entered into a collaboration with Monte Rosa Therapeutics to develop molecular glue degraders for immune-mediated diseases, which includes a $120 million upfront payment to Monte Rosa. Additionally, Deutsche Bank reiterated its Buy rating on the company following the announcement of a separate RNA deal.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Investing.com -- The furniture and mattress sector showed resilience during Black Friday weekend despite challenging weather conditions in the Northeast and Midwest, according to Piper Sandler’s latest industry analysis. While sales were generally flat year-over-year, this represents a slowdown from previous holiday weekends in 2025, largely due to tough comparisons with last year’s post-election surge and recent snowstorms affecting retail traffic.

Two standout stocks in the furniture sector have emerged as top picks for investors looking ahead to 2026:

Somnigroup International (SGI): Retailers reported Tempur brand outperformance during Black Friday weekend, with Sealy products either meeting or slightly exceeding expectations. The company’s proposed acquisition of LEG is viewed as a strategic move that could significantly enhance vertical integration and profit margins. According to Piper Sandler, this acquisition would give SGI control over springs, foam, and potentially adjustable bases, creating substantial operational efficiencies. While regulatory hurdles remain, industry insiders believe these can be navigated successfully. SGI remains one of Piper Sandler’s favorite names in the sector due to healthy industry trends and specific margin improvement opportunities in 2026 and beyond.

Wayfair (W): The online furniture retailer appears to have benefited from the recent snowstorms that disrupted brick-and-mortar shopping, boosting e-commerce sales over the holiday weekend. Despite overall flattish year-over-year performance across the furniture and mattress categories, Wayfair is positioned as Piper Sandler’s other top pick in the sector. The company’s digital-first approach provides resilience against weather-related disruptions that affected physical retailers during this crucial shopping period.

In recent news, Wayfair received varied analyst commentary; Jefferies downgraded the company to Hold citing valuation, while firms including Truist Securities and Piper Sandler reiterated their positive ratings.

The broader furniture and mattress industry faced challenging year-over-year comparisons, as last year’s Black Friday weekend saw exceptional growth (mean of +15%, median of +8%) driven by post-election optimism and pent-up demand. Despite this difficult comparison and weather disruptions, November sales generally remained positive year-over-year for retailers not severely impacted by late-month snowstorms.

As the industry moves into 2026, both SGI and Wayfair are positioned to capitalize on stable market conditions and company-specific growth initiatives, according to Piper Sandler’s analysis.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Investing.com -- RTX Corp (NYSE:RTX) stock rose 1.8% on Thursday after the company’s Raytheon business announced a strategic collaboration agreement with Amazon Web Services (AWS) to advance satellite data processing and mission control operations.

The expanded partnership aims to enhance national security capabilities by deploying scalable cloud-based solutions that leverage AWS artificial intelligence and machine learning services. Raytheon will use AWS technologies to help customers reduce mission costs, increase program flexibility, and accelerate capability delivery.

The collaboration will focus on improving mission data processing, bringing mission management to edge locations, advancing constellation command and control, creating scalable mission management systems, and incorporating AWS AI services like Amazon SageMaker and Amazon Bedrock.

"This collaboration unites the security, reliability, and higher levels of availability from AWS with Raytheon’s space systems expertise to create new possibilities for our customers in the space industry," said David Appel, vice president of U.S. Federal at Amazon Web Services.

Erich Hernandez-Baquero, vice president of Space Intelligence, Surveillance and Reconnaissance at Raytheon, noted that the partnership will help "accelerate responsible AI innovation" while maintaining high security standards.

The companies stated they are already executing programs for government and commercial customers under this agreement, which is set to strengthen RTX’s position in the space technology sector.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Investing.com -- Energy Vault Holdings Inc (NYSE:NRGV) stock jumped 7% on Thursday after the company announced its entry into the Swiss market with two contracts for its B-VAULT FlexGrid energy storage system.

The grid-scale energy storage solutions provider signed agreements with Schindler Aufzüge AG and Energie Wettingen AG, marking the launch of its FlexGrid program designed for commercial and industrial customers. The program is based on a new configuration of Energy Vault’s B-VAULT battery energy storage system platform engineered for 2-25 MW applications.

At Schindler’s global headquarters in Ebikon, Energy Vault deployed a 2 MW/2-hour system, transforming a repurposed fire department depot into an energy storage hub. The system was fully installed, commissioned, and qualified by Swissgrid in less than four weeks.

"The system’s quiet operation and seamless integration with our solar generation make it a benchmark project for sustainable industrial operations in Switzerland," said Herbert Stadelmann, Head Real Estate & Facility Management at Schindler Aufzüge.

For Energie Wettingen, Energy Vault will supply an 8 MW/2-hour system featuring a two-level stacked configuration that doubles energy and power capacity within a limited footprint.

Both projects will operate under CKW’s Flexpool, Switzerland’s largest flexibility network, enabling participation in frequency regulation, voltage control, and reactive power markets.

Energy Vault has established a regional service and logistics center in Central Switzerland to support deployments across the EMEA region. The company’s global B-VAULT portfolio now exceeds 2 GWh of deployed or contracted systems spanning Europe, North America, and Asia.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.