Jefferies ups Hikma to 'hold' as it removes generic Advair from model

Hikma Pharmaceuticals got a boost on Monday as Jefferies upped its stance on the stock to 'hold' from 'underperform'.

The bank said it was cutting its earnings per share estimates as it removes generic Advair from its model.

"Post 1H we lower EPS by <35% as we not only take a cautious approach to the base business but also stress test the bear case by removing Gx Advair from our model given ongoing uncertainty; we believe this base case lowers modelled intrinsic risks and gives optionality on Gx Advair, allowing us to focus on core fundamentals which we believe leaves limited downside.

"We therefore upgrade to hold as we believe fundamental drivers are now skewed to the upside."

Jefferies cut its 2018 earnings per share estimate to 94.8 cents from 131.9 cents previously and its sales estimate to $1.97bn from $2.22bn.

Back in May, Hikma cut its full-year revenue guidance to reflect a delay in the launch of the asthma drug after US regulators decided not to approve its generic version of GlaxoSmithKline's Advair.

Jefferies cut its price target on the stock from 1,390p to 1,045p, calling it the floor.

At 0940 BST, the shares were up 0.7% to 1,126.50p.