Last year wasn’t kind to the health care sector. That corner of the market, which includes Big Pharma mainstays such as Eli Lilly (NYSE: LLY), Johnson & Johnson (NYSE: JNJ), and AbbVie (NYSE: ABBV), finished dead last among the S&P 500’s 11 sectors with a meager 2.6% gain.
However, as investors’ concerns about elevated AI stock valuations and a potentially looming bubble continue to fuel a rotation out of tech and into cyclical sectors, stocks that call the healthcare sector home could see inflows as 2026 gets underway.
And with flu season now underway, drugmakers of vaccines that target strains of the A(H3N2) influenza virus could see a short-term catalyst that drives their top-line performances.
That is particularly relevant for Sanofi (NASDAQ: SNY), which by some estimates controls approximately 40% of the global flu shot market.
Flu Season Is Starting to Ramp Up
According to preliminary data from the U.S. Centers for Disease Control and Prevention (CDC), between Oct. 1, 2025, and Dec. 20, 2025, there have been an estimated 7.5 million to 13 million new cases of the flu, resulting in 3.5 million to 6 million medical visits, up to 160,000 hospitalizations, and as many as 17,000 flu-related deaths.
By the end of last year’s flu season, those figures reached staggering heights. The CDC stated that from Oct. 1, 2024, through May 7, 2025, the United States saw as many as 82 million afflicted, 1.3 million hospitalizations, and 130,000 deaths.
As this year’s season ramps up, investors on the hunt for a short-term tailwind that could bolster the health care sector should turn their attention to Sanofi, which manufactures a veritable portfolio of influenza vaccines that are available in the United States, including Fluzone, Flublok, and Fluzone High-Dose.
Notably, evidence reported during Sanofi’s Q3 2025 earnings call in October demonstrates the efficacy of its high-dose influenza vaccine, which underscores the company’s role as a world leader in flu shots.
CEO Paul Hudson noted that “data showed an 8.8% reduction in pneumonia or flu hospitalizations and an important 32% reduction in laboratory-confirmed flu hospitalizations versus standard dose vaccines.”
Sanofi’s Flu Shot Market Dominance
The company, based in France, is widely recognized as the predominant producer of influenza vaccines on the global stage. But it isn’t without its competitors.
While Sanofi may control much of the flu shot market, it does face some degree of competition globally. Specifically, London-based GSK (NYSE: GSK), formerly GlaxoSmithKline, Australia-based CSL Limited (OTCMKTS: CSLLY), and Pfizer (NYSE: PFE) present formidable market challenges on a year-by-year basis.
But Sanofi Pasteur—the global vaccines division of the French pharmaceutical company—is the world’s largest company that is focused solely on the development, production, and supply of vaccines. Those immunizations target everything from influenza and hepatitis to polio and meningitis.
By the end of Q3 2025, that market dominance contributed to Sanofi’s top line performance of more than $15 billion, which translated into $47 billion on a trailing 12-month (TTM) basis. For investors, that meant cash flow of $5.33 per share.
However, the company doesn’t just offer a short-term cyclical play for those looking to embrace a risk-off strategy. For income investors, Sanofi’s dividend can play a central role in a yield-focused portfolio.
SNY’s Healthy and Sustainable Dividend
Sanofi pays a dividend that currently yields 3.37%, or $1.60 per share annually. For context, that is better than the yield offered by AbbVie, Johnson & Johnson, and Eli Lilly.
Moreover, SNY’s dividend payout ratio—the percentage of a company's earnings paid out to shareholders as dividends—is a healthy 37.24%. That is more sustainable than AbbVie (497%) and Johnson & Johnson (50.19%).
Additionally, the company boasts an annualized five-year dividend growth rate of 4.99%, meaning it can serve as a reliable stock for passive income investors looking to outpace inflation.
What Wall Street Thinks About Sanofi
Despite only missing earnings expectations twice in the past 13 quarters, the company is undervalued from a price-to-earnings (P/E) perspective. Sonofi’s TTM P/E ratio is 11.30, and its forward P/E ratio stands at 11.06. Meanwhile, the S&P 500’s P/E multiple remains elevated at 22.5.
While institutional ownership remains lower than average at just over 14%, Wall Street’s bears are currently disinterested in SNY, with a minute 0.31% of the float—or 7.6 million of the 2.4 billion shares outstanding—currently shorted.
Based on 13 analysts covering SNY, the stock receives a consensus Moderate Buy rating and a 12-month price target of $62.67, which suggests more than 31% potential upside from today’s price.
Sanofi will report Q4 2025 and full-year results on Jan. 26, 2026.
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The article "Flu Season's Here—This Dividend-Payer Controls the Shot Market" first appeared on MarketBeat.
