7 LUPIN share price target reports by brokerages below. See what is analyst's view on LUPIN share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
We expect US business to get back on track and lead the growth for LPC over FY20-22E due to 1) resolution of Somerset, Goa and Pithampur (Unit-2) in FY21E 2) early launch of Albuterol 3) ramp up of Levothyroxyn 4) launch of complex injectables, Biosimilar and Spiriva in FY22E. LPC guided for EBITDA margin of 18-20% for FY21-22E, which we believe is achievable as LPC has lowered its R&D guidance to 9% of sales (earlier 11-12%), completed remediation work for plants under WL and divested lower margin business (Kyowa). With 14% QoQ growth in Q4FY20 for US, we expect this momentum to continue and US revenues to grow at 10% in FY21E and 15% in FY22E. We have increased our TP to Rs1001 (earlier Rs978) due to marginal change in tax rate assumption, as guided by LPC. We assign 24x PE on FY22E and maintain our BUY rating.
While LPC guided for ramp up in Levothyroxyn supply from December CY19, launches of Albuterol (gProAir) in 1HFY21E and injectables in US along with Fostair and Etanercept in EU in H2FY21E and FY22E, we expect lack of control on overheads will percolate lesser benefits in earnings. R&D guided to be around 10% and has possibility of flare up than guided range due to trials of key generics. The status of four plants continues to be under OAI status and new observations in Nagpur (formulations) plant continues to be strong overhang in valuation due to adverse risk-return matrix. With manufacturing issues (FDA) in key plants, there are likely to be delayed approval in complex generics. We have reduced our earnings estimates by 32% in FY21E and 26% in FY22E due to delayed launches in US, slower ramp- up in Levothyroxyn and divestment of Kyowa. We have downgraded our recommendation to ‘Reduce’ from ‘Hold’. We also roll forward to FY22E and derive our new TP of Rs653 (previous TP of Rs760) on PE 20x (earlier 19.5x) of FY22E.
We cut our EPS estimate for FY21 by only 2% to INR37.8 as the decrease in EBITDA due to the sale of the Kyowa business is likely to be largely offset by lower depreciation/interest cost. We continue valuing LPC at 21x 12m forward earnings to arrive at a price target of INR860. We remain positive on LPC, given its healthy ANDA pipeline for the US market, limited price erosion in the US base business and the steady outperformance in the domestic formulation market. Maintain Buy.
Lupin, which was founded in 1968 by Shri Desh Bandhu Gupta, is currently the fifth largest company in Indian Pharmaceutical Market and fourth largest by prescription volume in the US. We initiate coverage on Lupin with an Accumulate rating and a target price of Rs824 based on 20x FY22E earnings. FY20 base earnings (ex Ranexa) stand at around Rs 21 per share.
The sell-off of Kyowa at 1.8x EV/EBITDA is at justifiably lower valuation (vs. peer deals) due to inertia in Japan generic business. While the sell-off to increase concentration risk with higher contribution from US and India, there could be better option to deploy new capital (sourced from the divestment) in focused market. The efficient use of the capital may likely to increase profitability, return ratios and decrease leverage (to 0.08 fro, 0.32). With an opportunity of efficient capital allocation, there could be likely improvementin quality of earnings. We upgrade our recommendation to ‘Hold’ from ‘Reduce’ and increase TP to 760 (from Rs730) with 19.5x of FY21E.
While LPC guided for ramp up in Levothyroxyn supply and launches of injectables and gProAir (Albuterol) in US along with Fostair and Etanercept in EU in H2FY20E and FY21E, we expect lack of control on overheads will percolate lesser benefits in earnings. R&D guided to be around 10% and has possibility of flare up than guided range due to trials of key generics. The status of four plants in OAI continues to be a strong overhang in valuation due to adverse risk-return matrix. We maintain ‘Reduce’ recommendation and retain TP at Rs730.
We downgrade our revenue estimates for FY20E/FY21E by 3.7%/1.5% respectively on account of downgrade in US, Europe and other markets. We upgrade our EBITDA margin by 20 bps /80 bps to 18.9%/20% for FY20E /FY21E due to lower staff expenses, other expenses and R & D. We downgrade our EPS estimates by 8.2% for FY20E to Rs 28.3 and broadly maintain our EPS estimates for FY21E at Rs 41.1. We maintain our HOLD rating on the stock with a price target of Rs 861 based on 21x FY21E.
Q1 in line; Key markets lack positive surprises We believe that high concentration of revenues from key drugs such as gRanexa and Levothyroxin may be short-lived, given that FDA’s newstrategy of faster approvals led to reduce the longevity of complex genericsto few months. LPC’s dependence on fewer generics for its growth in USwould like to continue and render its risk-return matrix unfavorable. While R&D is guided to be limited at 10% of sales, there are possibilities of higher R&D costs due to larger clinical trials of inhalers, complex injectables and specialty products in US. We maintain ‘REDUCE’ rating and TP at Rs730.
Outlook and valuation: Limited downside; maintain ‘BUY’ The stock’s current valuation of 17.5x FY21E EPS – amid depressed earnings – offers an attractive entry in our view. Encouraging respiratory and biosimilar franchise may unlock value in the long run. We maintain ‘BUY/SP’ with a TP of INR900.
Cutting down our earnings estimates by 35.9%/28.6% for FY20E and FY21E to factor in lower than expected 4QFY19, USFDA regulatory concerns and higher tax rates. We downgrade our recommendation to Reduce from earlier HOLD recommendation with a revised Target Price of Rs715 (from Rs803 earlier).
We maintain a BUY on LPC following in line operational performance in 4QFY19. Our TP is revised at Rs 930/sh (22x FY21E EPS) following a 10% cut in our FY21E EPS to account for higher tax and slower ramp up in Solosec.Despite being marred by repeated US FDA issues, LPC’s visible levers for both revenue and profitability help maintain our positive stance. India franchise, valued at ~Rs 650/sh, continues to protect the downside risk.
We downgrade our revenue estimates by 2.8 %/1.1% for FY20E/FY21E on account of downgrade in India, US and API. We downgrade our EBITDA margin by 120 bps /70 bps for FY20E /FY21E due to higher staff cost, overheads and R & D. We downgrade our EPS by 20.9%/4.5% to Rs 30.8/ Rs 41 for FY20E/FY21E respectively. We downgrade our price target to Rs 861 based on 21x FY20E and maintain our HOLD rating on the stock.
According to the management’s assertion, the macro situation in the USgenerics space is on the mend with overall price erosion stabilising at low single digit. For FY20, it has guided for 20+ launches including key launches. However, the resolution of warning letter and clearance of Official Action Indicated (OAIs) status on plants could be a near term overhang along with progress on the margins front. Growth in India remains consistent but remains lumpy for APAC (mainly Japan). Like other pharma majors, Lupin has also chalked out a product and cost rationalisation drive. The result of this drive could be visible two to three years down the line. We arrive at our target price of | 810 based on 20x FY21E EPS of Rs 40.4.
We cut our FY20/21E estimates by 14-15% as we trim our EBIDTA margins to 15% vs 17% earlier due to weak consumption demand outlook in the near term. IGPL with 53,000MT capacities coming on stream by end of CY19 is set to be the third largest PAN player globally. Maintain BUY with a PT of Rs477 (Rs530 earlier) as we value IGPL at 6x EV/E or 10x PER FY21E. Maintain Buy
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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