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Numis cuts Hikma Pharma to ‘hold’ from ‘add’ on valuation grounds ahead of upcoming interims

The City broker has maintained its target price for the FTSE 250-listed firm at 1,560p, with the shares currently changing hands at 1,674.5p each
Drugs
The Numis analysts noted that Hikma's share price has doubled over the last 6 months, and think the likelihood of an upgrade to guidance is in the price

Numis Securities has downgraded its rating for Hikma Pharmaceuticals PLC (LON:HIK) to ‘hold’ from ‘add’ on valuation grounds ahead of the group’s upcoming interims.

The City broker has maintained its target price for the FTSE 250-listed firm at 1,560p, with the shares currently changing hands at 1,674.5p each, up 1.5% on Wednesday’s close.

READ: Hikma Pharmaceuticals shares slip as guidance maintained though current year has got off to “an encouraging start”

In a note to clients, Numis’s analysts said: “Hikma has travelled well into its upcoming interim results (due on 15 August) benefiting from change(s) in management that brings in specific US Generics expertise whilst releasing the former CEO to oversee group strategy from the position of Executive Chair.”

They added: “We also think the shares have priced in solid prescription trends in US Injectables and from certain generics, at a time when the currency head-winds from Egypt have eased.

”However, the share price has doubled over the last 6 months, and we think the likelihood of an upgrade to guidance is in the price and with the shares trading on 13x EV/EBITDA and 23x P/E downgrade to Hold”.

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