Broker tips: Hikma, Admiral, Bridgepoint

13th Aug 2024 15:37

(Sharecast News) - Analysts at Berenberg raised their target price on Hikma Pharmaceuticals from 2,000.0p to 2,100.0p on Tuesday following an "impressive" H1 performance.

Hikma reported 10% revenue growth and upgraded guidance for FY24 revenues to 6-8% and core operating profit to $700.0m-730.0m from 4-6% and $660.0m-700.0m, respectively.

Berenberg, which has a 'hold' rating on the stock, stated the upgrades were driven by strong profitability in Hikma's branded business, particularly from sales of oncology and diabetes medication, and the US generics business across the portfolio. Injectables growth was more subdued in H1, but a ramp-up was expected in H2 related to contract manufacturing in Europe.

As a result, the German bank updated its model to factor in guidance upgrades, stating the next catalyst for the stock was likely the filing of denosumab in the US, with development partner Gedeon Richter having already filed in Europe.

Citi said on Tuesday that it had issued a "positive short-term view" on Admiral ahead of its first-half results on 15 August.

The bank said it currently sits around 8% ahead of consensus on motor pre-tax profit and around 9% on group pre-tax profit as it believes consensus looks conservative.

"We update the UK motor market ahead of 1H results where we see an improving motor claims picture being led by lower damage inflation and lighter claims frequency as we see current claims inflation guidance from companies as conservative as repair volumes are circa 8% below pre-Covid levels," it said.

JPMorgan Cazenove upgraded Bridgepoint on Tuesday to 'overweight' from 'neutral' as it took a look at European private markets asset managers.

The bank said that despite macroeconomic worries, it remains constructive on the European private markets asset managers and expects Federal Reserve and European Central Bank rate cuts to drive higher volumes of transactions, in particular exits, resulting in higher carried interest and investment income and better fundraising momentum.

The bank said it was raising its adjusted earnings per share estimates for Bridgepoint by 4% in 2025 and 15% in 2027, driven by higher management fees. The target price was also lifted to 358.0p from 259.0p.

"The current low circa 11x 2026E P/E is an attractive entry point, with the shares offering upside both from earnings growth and rerating potential," it said.