Dechra slumps as Exane highlights ‘punchy valuation’
Dechra Pharmaceuticals
3,866.00p
08:01 16/01/24
Dechra Pharmaceuticals was under the cosh on Tuesday after Exane BNP Paribas initiated coverage of the stock at ‘neutral’ on valuation grounds.
FTSE 100
8,173.02
13:09 31/12/24
FTSE 350
4,510.61
12:59 31/12/24
FTSE All-Share
4,467.80
13:14 31/12/24
Pharmaceuticals & Biotechnology
20,085.55
12:59 31/12/24
"Dechra is the ninth largest animal heath player. Astute positioning, ongoing earnings per share upgrades and M&A have led the company to materially outpace the market in the last decade," Exane said. "This is likely to continue but a particularly punchy valuation leads us to initiate at neutral despite short-term upside risks."
As far as upside risks are concerned, Exane pointed to the upcoming approval of topical spray Tri-Solfen in Europe.
Exane said it expects Dechra to keep outperforming its markets. It said pipeline strength and geographical expansion of existing products should allow the company to post growth of around 8% a year to 2024. "Post pandemic, we expect Dechra to return to its highly successful M&A strategy," it added.
Exane has a 5,600p price target on the shares.
At 1240 GMT, the shares were down 5.6% at 5,028.40p.