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Investing.com -- Galderma Group AG has been downgraded by RBC Capital Markets to "sector perform" from "outperform," reflecting concerns about the company’s heavily backloaded 2025 growth trajectory and the recent strong performance of its stock price, which has limited further upside, in a note dated Monday.
Shares of the company were down 2% at 05:16 ET (09:16 GMT).
Despite a solid finish to 2024, RBC analysts believe the near-term outlook introduces uncertainties that could weigh on investor sentiment.
Galderma reported 2024 revenue of $4.41 billion, aligning with expectations, and adjusted EBITDA of $1.03 billion, surpassing forecasts by 2%. T
The Swiss pharmaceutical company benefited from reduced R&D spending on its Nemluvio drug, which contributed to stronger earnings.
For 2025, Galderma expects revenue growth of 10-12% at constant exchange rates and a core EBITDA margin of around 23%, consistent with RBC’s prior projections. However, the phasing of this growth has raised concerns.
The company has indicated that the first quarter of 2025 is expected to be subdued, with performance improving later in the year as U.S. consumer sentiment strengthens.
RBC analysts view this timeline as carrying risk, as market conditions and consumer spending trends remain uncertain.
While Galderma maintains that its revenue acceleration will materialize in the second half of the year, RBC suggests that investors may remain cautious until there is greater visibility on this improvement.
RBC made only minor adjustments to its financial models, with a slight reduction in Fillers & Biostimulators growth expectations, counterbalanced by a more optimistic outlook for Nemluvio.
The price target was raised to CHF 106 from CHF 101, but with Galderma’s shares already trading near this level, the analysts see little room for further gains in the short term.