Jefferies upgrades Hikma to 'buy'
Analysts at Jefferies upgraded drugmaker Hikma Pharmaceuticals from 'hold' to 'buy' on Wednesday, stating the group's share price was yet to reflect "a series of upcoming product catalysts".
Beyond Hikma's gVascepa and Gx Advair products, Jefferies said it also sees "significant optionality" from specialty product launches in US generics and new launches in injectables, both of which should sustain strong mid-term growth.
As a momentum stock, Jefferies said looking beyond the 2021 trading year; its 2022 underlying earnings forecasts were 5% above consensus, while 2023 was 11%, and added proprietary analysis of NADAC data with IQVIA data also suggested potential upside from Gx pricing if current trends persist.
Jefferies also noted that Hikma trades at a 10% discount on an enterprise value to earnings before interest, tax, depreciation and amortisation ratio despite marginally stronger growth than its peer group.
"Hikma has typically traded on momentum, and we see the strong outlook on new product launches as supportive of multiple expansion," said Jefferies, which issued Hikma with its new price target of 2,870.0p.