The team also favors defensive mid-cap European stocks such as BioMerieux and Fresenius, which offer strong free cash-flow yields and little tariff risk. Pharma, meanwhile, is benchmarked but hard to overweight. The sector is trading at an unusually large discount versus the norm and remains the least loved major sector in Europe, even as earnings momentum continues to surprise to the upside. UBS notes that pharma typically outperforms when credit spreads widen and PMIs fall, but the team cautions dollar weakness and political pressure on pricing in the US could keep a lid on any rally. Related articlesDefensive stocks show deep value as cyclicals run hot, UBS saysMarvell Technology stock falls after TD Cowen downgrade on cloud visibilitySocial media stocks slide as OpenAI launches Sora 2 model and video generation app