Hikma Pharmaceuticals PLC
Spreadex | Aug 09, 2018 07:06
Will Hikma Pharmaceuticals (LON:HIK) have the right prescription with next Wednesday’s half year results?
After suffering an extending decline since mid-2016, tumbling from an all-time high of £27 to a 5 year low of £8.72 by the end of February this year, Hikma has finally started to turn things around in the last few months.
A ‘Buy’ rating from Citigroup (NYSE:C) following mid-March’s full year results sparked the recovery, one that hasn’t really shown signs of slowing down. Hikma Pharmaceuticals PLC now sits at a current trading price, and near 15 month peak, of £16.98 (Spreadex, 08/08/2018).
The pharma-firm’s most recent update came in mid-May, with CEO Siggi Olafsson claiming the financial year had gotten off to an ‘encouraging start’, and that the efforts to reduce costs across the Group were ‘on track’ and that the company was continuing to ‘focus on enhancing and investing’ in its pipeline.
Injectables saw demand across its marketed portfolio offset ‘increasing competition on certain key products’, though with that competition to ‘accelerate over the course of the year’. The company expects the full year revenue at the division to come in between $750-800 million against 2017’s $776 million.
The Generics sector, meanwhile, benefitted from a ‘favourable product mix’ despite ‘challenging’ market conditions in the US, with reiterated revenues guidance of between $550 million and $600 million for 2018. That compares to $615 million in 2017.
Finally the Branded division is expected to see a stronger performance in the second half of the year, with annual revenue growth forecast to be in the ‘mid-single digits in constant currency’; in 2017 it posted $536 million.
In terms of next week’s interim results, investors may be looking for an improved guidance picture, as the firm stands to benefit from the shortage of injectable opioids used to treat patients caused by continued production issues at Pfizer (NYSE:PFE).
Hikma Pharmaceuticals PLC has a consensus rating of ‘Hold’ alongside an average target price of £11.84.
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