Berenberg cuts Hikma price target after update, maintains 'buy'
Berenberg cut its price target on Hikma Pharmaceuticals Plc on Friday to 2,300p from 2,510p following the company's trading update a day earlier, in which it downgraded medium-term guidance for the injectables unit.
It noted that Hikma maintained its FY25 segmental guidance, but lowered its medium-term core operating profit growth guidance.
Hikma also now expects to be at the lower end of its previously-guided range for three-year group revenue compound annual growth rate, Berenberg said.
"We understand that these changes in medium-term profitability guidance are mainly attributable to a shift in timings for the ramp-up of its manufacturing site in Bedford (due to delays in the supply of machinery), with the site now expected to be operational towards the end of 2027E and with commercial production anticipated from 2028E.
"While disappointing, we think that many of the key drivers for the business remain intact (albeit they have been pushed slightly further out).
"Therefore, we factor the lower end of the medium-term guidance into our forecasts, update our price target and retain our 'buy' rating."
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