Synthelabo: "Time For A Rest," Say GS Analysts

French drugmaker Synthelabo has been downgraded from market outperformerto market-performer by analysts at Goldman Sachs, who say the company's stock now appears to be fully valued on fundamentals.

Analysts Mark Tracey, John Murphy and Jane Henderson say they now expect Synthelabo to deliver compound earnings growth of 17% between 1997 and 2003, and estimate that around 6.5% of this growth will be accounted for by the change in the profit split arrangements with US firm Searle, which takes effect January 1, 2000.

This implies an underlying growth of only 10.5%. As more than 50% of Synthelabo group sales are exposed to the weak markets of Japan, France and Germany, and there is a gap in new product launches between 1999 and 2000, the analysts argue that Synthelabo is fully valued.