On Friday, CFRA analyst Wan Nurhayati adjusted the price target for Hikma Pharmaceuticals (OTC:HKMPY) Plc (HIK:LN) (OTC: HKMPF) to GBP20.00 from the previous GBP22.00 while maintaining a Hold rating on the stock. The revision reflects a price-to-earnings (P/E) ratio of 12.2x for the year 2024, which is consistent with Hikma's three-year average.
The company recently confirmed its full-year 2024 guidance, signaling sustained growth and momentum across its various business divisions. Hikma anticipates a revenue increase of 4%-6% for 2024, with its Injectables division expecting growth of 6%-8%, Generics aiming for 3%-5%, and the Branded segment projecting a low single-digit rise.
Despite the positive outlook on revenue, Hikma foresees a slight dip in core operating profit, projecting a range of USD660-USD700 million for 2024. This represents a 1%-7% decrease from previous expectations, primarily due to an uptick in royalties payable which has affected the margin for the generic version of sodium oxybate.
The analyst expects Hikma's growth trajectory to be propelled by new product launches and an expansion of its pipeline. However, there is a note of caution regarding potential price erosion in the market. CFRA's forecasts remain aligned with the company's unchanged guidance, predicting a 4% revenue growth for 2024 and an estimated core operating profit margin of around 22.6%, down from 24.6% in 2023.
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