Broker snap: UBS cuts target for Hikma after first half miss

26th Aug 2011 12:47

UBS has cut its target price for FTSE 250 pharmaceuticals firm Hikma from 900p to 850p after first half revenues and earnings came in below forecasts.The broker notes that revenues in the six months to 30 June of $395m missed its forecasts by 1.7% and consensus estimates by 0.4%."While reported earnings before interest and tax was 19% below consensus, the miss was attributed to unexpectedly high integration costs related to the integration of the MSI business (Baxter injectables)," UBS said."Although the working capital increased significantly in H1 2011, this was due to the MSI inventory build up and we expect the Cash Conversion Cycle to come back down in [the second half of] 2011 as MSI revenues increase."A buy rating is retained.Shares were 2.32% lower at 610p by 12:47.BC