Deutsche Bank downgraded Sandoz from "buy" to "hold" while raising its price target 11% to CHF70, sending shares down over 2%. The move comes after the stock nearly doubled since the bank's upgrade last March. Analyst Emmanuel Papadakis cited limited room for positive earnings revisions despite the pharmaceutical company's fourth-quarter results being "remarkably well received."

Sandoz now trades at 23x FY26 price-to-earnings, a level Papadakis says reflects current favorable policy backdrop and biosimilar growth but not anticipated deceleration in FY27. The analyst noted the stock's doubling came primarily from multiple expansion rather than earnings growth, with the new CHF70 target based on 22x FY26 P/E multiples.

Deutsche Bank flagged additional concerns including Sandoz's business mix and lagging cash flow conversion, with free cash flow yield remaining in low-single-digit territory. The brokerage expects FY27 to bring slower growth following this year's biosimilar expansion.