BofA Securities Names Top Pharma Picks Based on Pipeline Strength and Valuation

BofA Securities has identified AstraZeneca, Bayer, and Roche as its preferred pharmaceutical stocks, highlighting Genmab as the high-conviction pick among small- and mid-cap names. The selections are driven by a favorable balance of pipeline risk-reward and valuation, while Novartis retains a Buy rating even though it has already been the sector's top year-to-date performer.

AstraZeneca has seen its shares weaken amid speculation concerning eplontersen and BMY, intensifying discussions about patent expirations and pipeline capacity. BofA contends that upcoming pipeline data is necessary to counter that narrative and perceives a favorable risk-reward profile for the S4/AVANZAR readout.

The brokerage also expresses optimism about a packed catalysts schedule for 2027E, which includes CAMBRIA1, saruparib, Farxiga lifecycle management, and an oral PCSK9 inhibitor.

Bayer warrants a bullish outlook, in BofA's view, owing to its attractive valuation, a pharmaceuticals division that is not fully recognized by the market, and strengthening free cash flow. Asundexian is identified as the key asset within the pharma unit, with additional support from Nubeqa and Kerendia.

Roche is rated a Buy by BofA, which sees the substantial launch of giredestrant as a major catalyst and also views fenebrutinib's risk-reward favorably. Beyond those products, the firm notes a robust pipeline encompassing FGF21, TL1A, trontinemab, and NXT-007. BofA has increased its price target for Roche to CHF415 from CHF380.

Among small- and mid-cap biotech companies, BofA singles out Genmab as its favored choice, citing three high-confidence Phase III readouts anticipated in the fourth quarter of 2026E.

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