Jefferies upgrades Sun Pharma to buy
The firm said Sun Pharma now trades below long-term valuations at 16 times FY21 earnings.
By ET Bureau |
Jefferies has upgraded Sun Pharmaceutical Industries to buy from hold with a target price of Rs 535.
The firm said Sun Pharma now trades below long-term valuations at 16 times FY21 earnings. Jefferies expects margins of Sun Pharma to improve 230 basis points, led equally by improvement in the US as Halol unit ramps and by lower losses in specialty, offset by 400 bps fall at Taro.
"..we remain cautious on the success of Sun's specialty pipeline, we believe with cost in base, there should be improvement ahead," said Jefferies
Jefferies' bear case target price is Rs 370, which implies that downside looks limited.
The stock has corrected over 10 per cent on concerns around whistle-blower allegations and potential investigations. Although
most of the issues appear dated, it may remain an overhang for now until clarity on the investigation emerges, said Jefferies.
The firm said Sun Pharma now trades below long-term valuations at 16 times FY21 earnings. Jefferies expects margins of Sun Pharma to improve 230 basis points, led equally by improvement in the US as Halol unit ramps and by lower losses in specialty, offset by 400 bps fall at Taro.
"..we remain cautious on the success of Sun's specialty pipeline, we believe with cost in base, there should be improvement ahead," said Jefferies
Jefferies' bear case target price is Rs 370, which implies that downside looks limited.
The stock has corrected over 10 per cent on concerns around whistle-blower allegations and potential investigations. Although
most of the issues appear dated, it may remain an overhang for now until clarity on the investigation emerges, said Jefferies.
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