Cipla zooms 9% on stronger-than-expected Q1; brokerages cheer, raise targets

Shares of major pharmaceutical company Cipla rose nearly 9% in early trading on July 27 after the company’s earnings for the April-June period beat expectations. Some brokerages also raised their price targets on the stock as they applauded the company’s impressive numbers for the quarter under review.
While the company’s net income and revenue for the quarter were higher than analysts’ estimates for the first quarter, it also prompted management to raise its current-year profit margin forecast to 23% above target. previous spending was 22%.
In addition, management also outlined a strong growth outlook for the coming quarters, forecasting growth to surpass the prescription drug business in India and quarterly revenue of $210-215 million in the United States. Ky. All of the above-mentioned positives combined have ignited positive sentiments around Cipla. What do analysts say?

As of 9:22 a.m., Cipla shares were trading up 7.9% at Rs 1,153.05 on the National Stock Exchange. Macquarie also backs Cipla’s decision to increase margin guidance, while the company also sees the possibility of an upward revision to the 2024 margin target. Macquarie has a ‘outperform’ call on the margin target. Cipla, with a price target of Rs 1,050. Offshore brokerage Nomura praised management’s decision to increase its 2024 margin guidance while acknowledging that Cipla’s profit was higher than the company’s estimates. To capture this, the company has also increased its EPS estimate for the 24/25 fiscal year for Cipla by 3% per share. Not only that, the company also raised the target price for the stock to Rs 1,229, while maintaining its “buy” rating.
JP Morgan also raised its share price target to Rs 1,210 while maintaining its “overweight” appeal to the drugmaker. The company sees strong prospects for Cipla’s key markets, including forecasts for a market that beats growth in its business in India. He also believes that a strong complex asset system will accelerate Cipla’s growth after fiscal 2025 in the US market, as well as increase market share for existing products. Jefferies, on the other hand, has opted to upgrade its rating on Cipla to “buy” with a stock price target of a 34.4% increase to Rs 1,210. The company has also increased its EPS estimate for fiscal year 24-26 by 12-20% to deliver impressive quarterly numbers. Jefferies also remains bullish on management’s strong growth prospects in the coming quarters.