Broker snap: UBS upgrades Hikma after recent falls

17th Apr 2012 10:47

UBS has upgraded its rating for pharmaceuticals group Hikma from neutral to buy, leaving its 755p target price unchanged, following the sell-off since the firm's full-year results last month.The broker sees a 10% and 6% downside risk to 2012 and 2013 earnings per share estimates - "we believe consensus does not yet fully reflect the increase in interest charges or the slower-than-expected ramp up in generic earnings before interest and tax margin."Since March 14th, the shares have fallen from a recent high of 774p to 656.5p as of yesterday's close, around 15%. UBS believes that the current share price already fully reflects an upcoming change in consensus. "This leads us to believe that the current share price offers an attractive entry-point for Hikma."Meanwhile, the broker thinks that Hikma will continue to acquire assets which could boost sentiment despite the purchase of Moroccan Promopharm not being taken well by the market late last year. "We also believe that the trend of large Pharma players to use third party distributors in the MENA region should continue to strengthen and see Hikma as the main player to benefit from this trend."Shares were up 1.98% at 669.5p in morning trade on Tuesday.BC