Morgan Stanley took a more bullish stance on Galderma Group AG on Thursday, moving the stock to an "overweight" rating from "equal-weight" and increasing its price target to 210 Swiss francs from 160 Swiss francs. The broker said the revision reflects higher growth assumptions for Nemluvio, the company’s biologic for serious dermatology conditions, and for injectable aesthetics products.
The new target of 210 Swiss francs implies about 19% upside versus Galderma’s July 29 closing price of 177.10 Swiss francs, according to Morgan Stanley.
Analysts at the firm raised their 2027-2030 projections across several metrics. Revenue forecasts were increased by 5-6%, EBITDA by 2-5% and earnings per share by 9-11%. Morgan Stanley attributed those adjustments primarily to stronger expected performance from Nemluvio along with higher contribution from injectable aesthetics - a category that the broker specified includes neuromodulators, biostimulators and dermal fillers.
The broker now forecasts peak sales for Nemluvio of $5.1 billion, notably above the consensus figure of $4.2 billion cited by Morgan Stanley. The firm said much of its upgrade was driven by these revised Nemluvio assumptions.
Morgan Stanley noted it had maintained an equal-weight recommendation on Galderma since the company’s initial public offering, pointing to macroeconomic and other external risks that can affect beauty and skincare demand. Despite those earlier concerns, the analysts said Galderma "has consistently outperformed expectations in all parts of the business since the IPO," and that dynamics in the first half of 2026 "do not show signs of deceleration or softness."
The broker sees scope for Galderma to deliver another upgrade to its sales guidance in the third quarter, driven by continued strength in injectable aesthetics and Nemluvio. Morgan Stanley forecasts 22.5% sales growth at constant currency for 2026, referencing management’s expectation that Nemluvio could generate more than $1 billion in sales in 2026, potentially from U.S. sales alone.
On that basis, the firm said it expects Galderma to either raise or narrow its 2026 sales guidance toward the top end of the company’s stated range of 19-21% constant-currency growth when it reports third-quarter results.
Regarding valuation, Morgan Stanley noted Galderma trades at 24 times 2027 EV/EBITDA and 26 times 2027 price-to-earnings. The broker described those multiples as expensive but defensible in light of the company’s projected compound annual growth rates from 2027 to 2030: 12% sales CAGR, 19% EBITDA CAGR and 21% EPS CAGR.
The note adjusted the firm’s scenario valuations as well: the bear-case target was raised to 150 Swiss francs from 110 Swiss francs on the basis of de-risking around the growth outlook for key drivers, while the bull-case target was lifted to 250 Swiss francs from 190 Swiss francs, reflecting the potential for accelerated growth through innovation, new product launches and geographic expansion.
Finally, Morgan Stanley said it values Galderma using a discounted cash flow methodology that applies a weighted average cost of capital of 7.1% and a terminal growth rate of 2%.