Synthelabo: Best Earnings Growth Rate

Synthelabo still has the best earnings growth rate of the French drug companies, despite a natural slowdown expected in the future, having experienced earnings growing seven fold in the period 1989-1994, say analysts Franc Gregori and Marie-Helene Leopold at Paribas Capital Markets.

The firm itself is expecting to see net profits rise 10% in the current year, and is forecasting a net margin of 9% on sales of over 10 billion French francs ($1.9 billion), based on sales in the first few months of the year.

The analysts note that Synthelabo's sales are still volume driven in international markets, where margins are far higher than in France. Although Synthelabo's size is small compared with the industry giants, the analysts say it is a leading player in Europe in the central nervous system therapeutic area, and as such has a niche strategy.