Hikma Pharmaceuticals PLC (LON:HIK) was the biggest faller on the FTSE on Monday as it was downgraded to underweight from neutral by JP Morgan.
Analysts at the investment bank said headwinds at the generics division are “underappreciated” and nudged up its price target to 1,850p from 1,800p.
READ: Hikma and Vectura make new application for GSK knock-off[hhmc]
The Jordan based pharma group had said in November the business was showing “strong” improvement in profitability, as it reiterated full-year revenue guidance.
The company said its injectables and branded divisions were both delivering good results.
JP Morgan added there are no changes expected in the short-term besides some share price volatility due to reforms in the US healthcare system.
The sectors earnings per share (EPS) growth for the current year is estimated to accelerate to 8% from 7% last year, while 2021 growth will reach 10%.
This factors in any impact from proposed pricing reforms as part of the 2020 US election which will implemented next year at the earliest, and are likely to have only a low-mid single digit negative impact on sector EPS even in a worst case, analysts said.
JP Morgans top pick in the big caps was AstraZeneca PLC (LON:AZN), as iRead More – Source
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