Panmure Liberum has raised its target price for Hikma Pharmaceuticals PLC (LSE:HIK, OTC:HKMPF) from 1,600p to 1,900p, saying the drugmaker’s strong first-half results support further upside in its shares.
The broker said Hikma’s recent interim results were reassuring, with the only surprises coming on the upside and beats reported across the business.
Panmure Liberum said the next stage of a rerating would depend on Hikma delivering against its financial year 2026 forecasts.
It slightly raised its earnings before interest and tax forecasts to reflect the strong first-half performance, while making no material changes to its broader forecasts.
Panmure Liberum said its forecasts remained broadly in line with market consensus and also adjusted the timing of its modelling for Hikma’s share buyback.
The broker also changed its treatment of capital contributions to Hikma’s prescription medicines contract manufacturing operations, which are recorded as deferred income and released over several years.
Hikma shares have risen from their February lows, but Panmure Liberum said it still saw plenty of upside.
It identified a second step for the rerating: convincing investors that higher research and development investment can deliver a more predictable earnings trajectory.
Panmure Liberum said it believed Hikma could achieve this, but the company still needed to demonstrate that its increased investment would translate into more consistent earnings.
