0R15 8884.0068 1.4156% 0R1E 9171.0 0.0% 0M69 None None% 0R2V 255.5 0.3929% 0QYR 1619.0 0.0% 0QYP 434.5 -0.344% 0RUK None None% 0RYA 1600.0 4.5752% 0RIH 195.2 1.3763% 0RIH 195.2 1.3763% 0R1O 225.5 9877.8761% 0R1O None None% 0QFP None None% 0M2Z 255.0 0.2457% 0VSO 33.3 -6.4738% 0R1I None None% 0QZI 596.0 0.0% 0QZ0 220.0 0.0% 0NZF None None% 0YXG 236.3943 1.5483%
Hikma Pharmaceuticals Plc (LON: HIK) – Strengthening foothold in Europe and expanding into new markets.
Hikma Pharmaceuticals PLC (LON: HIK) is an FTSE 100 listed United Kingdom-based pharmaceuticals and biotechnology Company, specializes in the business of developing, manufacturing, and marketing a portfolio of branded and non-branded generic medicines. Moreover, HIK operates through four reportable business segments: Injectables, Generics, Branded and Others. It has a strong pipeline with over 500+ products, along with that, the Company has 30 US products under development.
On 6 August 2021, HIK would publish its H1 FY2021 results.
Recent trend of dividend payments
(Data Source: LSE Website, Research done by Kalkine Group)
The chart above demonstrates the consistent dividend payment done by HIK from FY2017 to FY2020. The last dividend of FY2020, USD 0.34 per share, was paid on 26 April 2021 (final dividend). It had an ex-dividend date of 18 March 2021.
The current dividend yield of HIK at about 1.50% remains above the UK 10-year bond yield at about 0.5750%.
Growth Prospects
Key Risks
Now we will analyse some key fundamental and shareholders statistics of Hikma Pharmaceuticals Plc.
Trading Statement (released on 30 April 2021)
Financial and Operational Highlight (for the year ended 31 December 2020, as of 25 February 2021)
(Source: LSE Website)
Financial Ratios (H2 FY2020)
Share Price Performance Analysis
(Source: Refinitiv, Research done by Kalkine Group)
On 29 July 2021, at 8:15 AM GMT, HIK’s shares were trading at GBX 2,607.00, down by 0.87% against the previous day closing price. Stock 52-week High and Low were GBX 2,768.00 and GBX 2,125.00, respectively.
On a daily chart, HIK’s price is sustaining above 20-day EMA of about GBX 2,589.00 and 20-day SMA of about GBX 2,604.00, indicating the possibility of an upward movement. The MACD line is trading above the centreline, and however, forming a negative crossover with the signal line.
In the last three months, HIK’s’s stock has delivered a decent positive return of ~13.12%. Also, it has outperformed the FTSE All-Share Pharmaceuticals and Biotechnology index with a return of around 8.18% and the FTSE 100 index with a return of about 0.76%.
Valuation Methodology: Price/Earnings Approach (NTM) (Illustrative)
Business Outlook Scenario
HIK delivered a resilient performance so far in FY2021, with launch of more than 30 products across markets. It has launched the generic version of Advair Diskus and received FDA approval of KLOXXADO. It expects global Injectables core revenue to grow in the mid-single digits. The Company could benefit from its strong presence in the US, FDA approval of KLOXXADO, continued strategic progress and solid core financials, new launches in US injectables portfolio and expansion into new markets for the rest of FY2021 and beyond.
Considering the Company’s solid growth opportunity, its strong financials, its expansion into new markets , the better profitability and liquidity of the business than the industry, and support from the valuation as done using the above method, we have given a “BUY” recommendation on Hikma Pharmaceuticals Plc at the current price of GBX 2,607.00 (as on 29 July 2021 at 8:15 AM GMT), with lower-double digit upside potential based on 22.87x Price/NTM Earnings (approx.) on FY21E earnings per share (approx.).
*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached. Resistance level 2 is at 52 week high and if Hikma Pharmaceuticals Plc attains momentum or breach it, then target price as per valuation table could be seen in the near term as per technical chart analysis.
*All forecasted figures and Peer information have been taken from Refinitiv.
*The dividend yield is subject to change as per the stock price movement.
*The reference data in this report has been partly sourced from Refinitiv.
Disclaimer
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