Citi hikes Hikma price target, cites ‘healthy trends’ for injectables and US Generics
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Hikma Pharmaceuticals
1,956.00p
16:45 06/09/24
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.
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"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.