Chart of the week
Since the beginning of 2022 the European pharmaceutical sector (Stoxx Europe Total Market Pharmaceuticals) has strongly outperformed the market average (Stoxx Europe Total Market).
After having distinguished itself by its resilience in the first quarter of 2020 (health crisis), the pharmaceutical sector had experienced a period of significant underperformance between April 2020 and April 2021. The trend has now clearly been reversed.
OUR ANALYSIS
Last year, we reported that the pharmaceutical sector was facing a paradoxical situation, accumulating significant underperformance despite its ability to consistently develop new treatments. Investors were shying away from
pharmaceutical companies with little involvement in the development of Covid vaccines, while they worried that those most involved would only partially benefit from their success with the lifting of manufacturing patents.
The gradual resolution of the health crisis, the conflict in Ukraine, the return of high inflation and the prospect of rising interest rates have led to a change in perception of the pharmaceutical sector. The sector is now appreciated for its defensive aspect in the face of a more uncertain economic environment. The intrinsic qualities of these companies are thus better taken into account and the sector is gradually regaining a valuation more in line with its growth and profitability prospects.
The opinion expressed above is dated April 22, 2022 and is subject to change
See also: https://latribune.lazardfreresgestion.fr/en/increasing-risks-to-chinese-growth/
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Past performance does not guarantee future performance.
This document is not pre-contractual or contractual in nature. It is provided for information purposes. The analyses and descriptions contained in this document shall not be interpreted as being advice or recommendations on the part of Lazard Frères Gestion SAS. This document does not constitute an offer or invitation to purchase or sell, nor an encouragement to invest. This document is the intellectual property of Lazard Frères Gestion SAS. LAZARD FRERES GESTION – a simplified joint stock company with share capital of €14,487,500 – Paris Trade and Companies Registry No. 352 213 599. 25, RUE DE COURCELLES – 75008 PARIS, FRANCE
