Alliance Pharma PLC (LON:APH) has transformed its exposure to consumer healthcare over the last 5-6 years, something that the market is overlooking says broker RBC.
Almost three-quarters of Alliance’s revenues now come from consumer healthcare with superior growth to legacy prescription products and helped by a playbook of internationalisation, new distribution channels, packaging and line extensions.
The switch has also reduced the exposure to risk from government pricing and regulatory decisions.
Versus the FTSE250 Alliance is near the bottom of its 5-year trading range, implying that this transformation has not been appreciated by the market.
Revenues should grow by 8% over the next four years driving profits up by 12% a year, with more if the company flexes its balance sheet fully.
“Outperform with a 106p price target” is the broker's view.
Shares rose 3.3% to 94p.