6 hrs ago
JPMorgan Names Four Pharma Picks, Torrent Leads Upside
JPMorgan looked at several drug companies and picked four it rates positively.
Torrent Pharma has the biggest gap between its share price and the brokerage’s target.
Cipla is another preferred pick, with growth expected from its businesses in India and the United States.
Divi’s Laboratories and Anthem Biosciences work in drug development and manufacturing services.
JPMorgan likes both, but its targets suggest little or no share-price upside at current levels.
The companies have different possible growth drivers, such as new products, project work and business integration.
These are the brokerage’s estimates, not guarantees of future performance.
JPMorgan rates Torrent Pharma, Cipla, Divi’s Laboratories and Anthem Biosciences ‘Overweight’.
Torrent Pharma has a Rs 5,950 target price and the highest stated upside, at 24.7%.
Cipla has a Rs 1,600 target and 19.5% upside, supported by domestic growth and respiratory products.
Divi’s Laboratories is rated ‘Overweight’ but trades 4.7% above JPMorgan’s Rs 9,100 target.
Anthem Biosciences has a Rs 900 target and 1.1% upside; JPMorgan also rates Zydus ‘Neutral’ and Dr Reddy’s ‘Underweight’.
- Who
- JPMorgan and the four companies it rates ‘Overweight’: Torrent Pharma, Cipla, Divi’s Laboratories and Anthem Biosciences.
- What
- JPMorgan outlined target prices and potential upside or downside for four pharmaceutical and CRDMO stocks.
- Where
- The companies’ businesses include India and the United States; no specific location for the report is stated.
- When
- The article discusses expectations for the September quarter; it does not state a publication date.
- Why
- The brokerage cites company-specific growth drivers, including domestic businesses, product launches, acquisition integration and CRDMO project execution.
Positive business outlook
Limited target-price upside
Divi’s Laboratories
Positive business outlook
JPMorgan rates the company ‘Overweight’ and cites custom synthesis, new projects and capacity-related catalysts.
Limited target-price upside
Its Rs 9,100 target implies 4.7% downside from the trading level used in the article.
Anthem Biosciences
Positive business outlook
JPMorgan expects project execution and the resumption of key assets to support CRDMO growth.
Limited target-price upside
The Rs 900 target implies only 1.1% upside, while expansion-related depreciation and costs weigh on profit growth.
Key facts
- Torrent Pharma
- ‘Overweight’; target Rs 5,950; stated upside 24.7%.
- Cipla
- ‘Overweight’; target Rs 1,600; stated upside 19.5%.
- Divi’s Laboratories
- ‘Overweight’; target Rs 9,100; stated downside 4.7%.
- Anthem Biosciences
- ‘Overweight’; target Rs 900; stated upside 1.1%.
- Other ratings mentioned
- Zydus Lifesciences: ‘Neutral’; Dr Reddy’s Laboratories: ‘Underweight’.
- Torrent catalysts cited
- JB Pharma integration, domestic chronic therapies, specialty products and new launches.
- Cipla catalysts cited
- India respiratory, cardio-diabetes and pain therapies, plus US respiratory products and new launches.
Quotes
JPMorgan analysts
Analysts whose pharmaceutical outlook and stock ratings are reported in the article.
“India to gain from US, as management expects growth of 16% YoY from acquisition of JB Pharma. JB Pharma’s growth to be driven by outperformance in the chronic segment. US to see marginal decline YoY due to pressure in generics but increase 12% QoQ to $480mn owing to ramp-up in Leqembi, Lunivect and broader strength in specialty.”
financialexpress.com
“US sees large base growth of 7% YoY, with US respiratory and new products expected to remain strong. India is expected to grow 12% YoY with strong growth in 2Q in India respiratory, cardio-diabetes and pain for Cipla.”
financialexpress.com
Sources
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