HSBC Sees Biopharma Shift from 'Rising Tide' to Bottom-Up Stock Picking

HSBC has adjusted its ratings and target prices for several biopharma companies, citing a lower sector risk premium following a rally in the second quarter of 2026. Analysts led by Rajesh Kumar said pharma multiples are at a decade high, and further outperformance will require a medium-term growth upgrade rather than 'defensive positioning in out of AI/Tech rotation.'

The team mapped and scored over 100 clinical catalysts through 2027 across its coverage universe. The next 12 months look less like 'a rising tide lifts all boats' and more like bottom-up stock picking, according to the analysts. Catalyst quality, franchise adjacency, and loss-of-exclusivity operational gearing will separate winners from value traps.

HSBC upgraded Novartis to Hold from Reduce, raising its target price to 110 Swiss francs from 95, after 'back-to-back trial failures for pelacarsen and del-desiran.' The analysts expect a near-term consensus downgrade cycle but believe the negative catalyst path has largely played out.

The broker downgraded Amgen to Hold from Buy, with the target price cut to $425 from $445. HSBC said the stock has 're-rated on strong operational execution and positive estimate revisions' and now trades close to its target price, leaving near-term upside as more limited. The analysts flagged that the company's re-rating over the next 12 months will hinge on the MariTide obesity trial readout.