Hikma Pharmaceuticals PLC (LSE: HIK)

Hikma Pharmaceuticals PLC (LSE: HIK) is an FTSE 250 listed United Kingdom-based pharmaceuticals and biotechnology Company, that specializes in the business of developing, manufacturing, and marketing a portfolio of branded and non-branded generic medicines. This Report covers the Investment Highlights, Conclusion, and Recommendation on the stock.

On 03 August 2023, HIK will announce H1 FY23 results for the 6 months ending 30 June 2023.

Investment Rationale – Sell at GBX 1,841.00

• Reduction in Profitability: HIK’s operating profit has decline 52% YoY and its basic earnings per share went down 54% YoY during FY22.
• Decline in Cashflow from operating activities: The Company’s cashflow from operating activities has declined 17% YoY from USD 638 million during FY21 to USD 530 million during FY22.
• Technical Standpoint: The momentum oscillator, 14-day RSI (~63.24) is approaching an overbought scenario. Moreover, the stock price is trading very close to its 52 week high levels. Thus, stock prices can face retracement in the short-term.
• Macroeconomic Uncertainties: The market sentiments can remain weak in the short-term due to 40-year high inflation, subdued consumer disposable income, geopolitical tensions, and political risks.

Share Price Chart  

Conclusion

Based on the decline in profitability during FY22, macroeconomic challenges, and price action stance, a "SELL" recommendation on Hikma Pharmaceuticals PLC (LSE: HIK) has been given at the closing market price of GBX 1,841.00 (as of 28 April 2023).

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 28 April 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 5: Dividend Yield may vary as per the stock price movement.

Disclaimer

References to ‘Kalkine’, ‘we’, ‘our’ and ‘us’ refer to Kalkine Limited.

This website is a service of Kalkine Limited. Kalkine Limited is a private limited company, incorporated in England and Wales with registration number 07903332. Kalkine Limited is authorised and regulated by the Financial Conduct Authority under reference number 579414.

The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. No advice or information, whether oral or written, obtained by you from Kalkine or through or from the service shall create any warranty not expressly stated. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation.

Kalkine does not offer financial advice based upon your personal financial situation or goals, and we shall NOT be held liable for any investment or trading losses you may incur by using the opinions expressed in our publications, market updates, news alerts and corporate profiles. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation. Kalkine’s non-personalised advice does not in any way endorse or recommend individuals, investment products or services for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional authorised financial planner and adviser. You should be aware that the value of any investment and the income from it can go down as well as up and you may not get back the amount invested.

Kalkine Media Limited, an affiliate of Kalkine Limited, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.