Citi hikes Hikma price target, cites ‘healthy trends’ for injectables and US Generics

Citi lifted its price target on Hikma Pharmaceuticals on Tuesday to 2,845p from 2,770p as it said IQVIA April data highlighted "healthy trends" for injectables and US Generics.

"The strategy at US Generics (30/20% of sales/EBIT) longer-term remains reducing volatility and delivering a sustainable EBIT of $100-120m, as a result of efforts to increase contract manufacturing activities and further broadening the Specialty portfolio," it said.

"More importantly, we argue investors should focus on long-standing efforts to improve the product mix at Branded (24/22% 2024e sales/EBIT) finally paying dividends, resulting in a sustainable step-up in profitability.

"Lastly, Injectables continues to offer high single-digit growth prospects at attractive margins, with greenfield efforts to develop a US compounding business expected to break even in 2025."

Citi said it assumes $350m sales and 35% EBIT margin in 2035.

The bank said it was moving to the top end of guidance on stronger profitability at Branded/Injectables.

At 0930 BST, Hikma shares were up 2.8% at 1,983.44p.