UPDATE: Leerink Swann Downgrades Sanofi Based on Low Visibility

In a report published Friday, Leerink Swann analyst Seamus Fernandez downgraded Sanofi (NYSE: SNY) from Outperform to Market Perform and lowered the PT from €83 ($113.7142) to €80 ($109.6191) based on low visibility in the company's recovery.

Fernandez noted that this valuation does not include Sanofi's €3B ownership interest in Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) or the potential repurchase of L'Oreal's 9% stake.

Leerink Swann commented that they continue to see long-term opportunity for products including alirocumab and dupilumab, but "we are skeptical that visibility on the base business, which includes substantial generic and tail product exposure, will improve materially during the next 12 months. This makes it increasingly difficult for us to recommend putting new money to work in SNY until consensus estimates better reflect this risk or substantial new pipeline opportunities emerge." The analyst further raised concern over the payor environment's ability to compete with other "faster-than-expected product launches."

Fernandez reduced his estimated EPS forecast for 2014 from €6.10 to €5.62 and sales estimate from €35,080 to €33,238.

Sanofi shares closed at $50.13 (€36.5993) on Thursday.