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Regeneron (NASDAQ:REGN) upgraded to Buy while AbbVie (NYSE:ABBV) gets downgraded as Citi flags Trump administration policy risks. Citi's Geoff Meacham says President Trump's Most Favored Nation drug-pricing order and threats to PBMs pose uneven exposure across U.S. pharma leaders.
Meacham argues Regeneron's Eylea franchise and melanoma pipeline optionality leave it well-positioned, raising his price target to $700 from $600 after a roughly 55% stock pullback since last year's peak. Conversely, AbbVie's beat and raise momentum is set to wane as Humira's growth slows and its late-stage pipeline lacks depth, prompting a downgrade to Neutral and a PT cut to $188 from $205.
These rating shifts follow Monday's executive order tying U.S. drug prices to the lowest OECD rates and calls to curb PBM influencemoves that initially knocked down industry shares already bruised by trade-tariff talk. Meacham believes investor expectations have reset, and that positive regulatory or commercial news could spark a meaningful sentiment reversal for Regeneron.
Why It Matters: With pricing reforms and PBM overhauls looming, pharma investors need to differentiate between companies that can absorb policy headwinds and those with thinner pipelines.
This article first appeared on GuruFocus.