Galderm_Initiate_OW_创作_Nemo

Restricted - External Initiating CoverageGALD.S/GALD SEOVERWEIGHTfrom Not RatedEuropean Pharmaceuticals& Life SciencesPrice TargetCHF 133.00Price (04-Jul-25)CHF 117.30Potential Upside/DownsideSource: Bloomberg, Barclays ResearchMarket Cap (CHF mn)Shares Outstanding (mn)Free Float (%)52 Wk Avg Daily Volume (mn)Dividend Yield (%)Return on Equity TTM (%)Current BVPS (CHF)Source: BloombergPrice PerformanceExchange-SWX52 Week rangeCHF 119.49-64.69Source: IDCLink to Barclays Live for interactive chartingEuropean Pharmaceuticals & LifeSciencesYihan Li, PhD+44 (0)20 3555 3563yihan.li@barclays.comBarclays, UKEmily Field, CFA+44 (0)20 7773 6263emily.field@barclays.comBarclays, UKShirley Chen, PhD+44 (0)20 7773 2109shirley.chen@barclays.comBarclays, UK NEUTRALUnchangedfrom N/A+13.4%27905237.9038.340.70.073.5132.80 1In April 2025 the Trump administration announced an investigation into imports of pharmaceuticals into the US, raisingthe prospect of the potential imposition oftariffs.For the purposes of our analysis we use a hypothetical levy of 25%,similar to the 25% levies previously announced on steel, aluminium and car imports. (link)owner, at an (undisclosed) premium to the then market price. We see this potentially as only afirst step. We interpret L'Oréal's repeated comments on the call at the time the deal wasannounced about "keeping future options open" as signalling the possibility of subsequentincreases in the Galderma stake. We don't think anything is likely in the short term, but forillustrative purposes show that L'Oréal would havesufficientheadroom of €32.1bn (CHF30.1bn)based on 2x net debt / EBITDA for a hypothetical transaction closing at the end of 2025, or€42.9bn (CHF40.35bn) headroom at 3x net debt / EBITDA, before any incremental EBITDA fromsuch a transaction. This lookssufficientfor what L'Oréal management could do in the context ofGalderma's market cap.Modest impact from potential Pharmatariffs;MFN risks less concerning for GALD.Whileuncertainties aroundtariffsand Most Favored Nation (MFN) policies remain a potentialoverhang for the sector, our analysis suggeststariffrisks are generally manageable for GALD,based on our illustrative analysis of a 25%tariffon Pharma1(MSD% drag on GALD’s EPS for2026-28E). Moreover, we view GALD as relatively insulated from MFN given its significantexposure to self-pay consumer aesthetics and skincare markets. Galderma’s diversifiedgeographic footprint and premium product positioning would provide additional protectionagainst potential adverse policy developments.Premium valuation justified by unique profile and DD% 5-year CAGR for both top andbottom line.We believeGALD’s distinct hybrid business model (high-growth therapeuticdermatology with Nemluvio launch, aesthetics, and skincare consumer) positions it uniquelyamong peers. With our forecast 13% sales CAGR in 2023-2027E, robust margin expansion(+445bps 2023-27E), along with strong execution record, we believe GALD warrants a premiumvaluation more comparable to consumer/luxury stocks rather than traditional pharma peers.Our NPV and peer-relative valuation leads to a CHF 133 price target.2 The Story in 6 Charts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8Company background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8Investment thesis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Risks to our investment thesis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Valuation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10NPV valuation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Peer valuation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10Macro uncertainty: Potential impact of USMFN/tariffpolicy/regulatorychanges on GALD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Key Debate: To what extent could UStariffsimpact GALD?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12GALD looks more insulated from MFN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13Impact of FDA/HHSstaffingreductions on GALD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Therapeutic Dermatology: Nemluvio – scratching an itch to break intobiologics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .