Hikma Pharmaceuticals PLC (HIK.L): Revising estimates, reiterate Buy

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11 Aug 2026 08:33:57 ET │ 14 pages

Hikma Pharmaceuticals PLC (HIK.L)

Revising estimates, reiterate Buy

CITI'S TAKE

We update our estimates to reflect stronger-than-expected 1H26 results

and recent trends: we increase our 2026-30E group revenue estimates by

c.1% on c.90bp higher ccy growth this year (driven by higher expectations

for OUS Injectables and Branded) and Fx mark-to-market. We raise our

EBIT margin assumptions by c.20bps p.a. on average through the forecast

period to reflect 1H26 trajectory and expected phasing in 2026E. The

stock is +5% since 1H26 results on 6 Aug, which we viewed as a proof

point for Hikma’s improving execution (discussed here). Hikma trades on

c.7x EV/EBITDA and c.9x PE (2027E), below the average multiples from

2023 to date, which we continue to see as unwarranted. A combination of

c.5% dividend yield, a strong balance sheet, and potential for further

buyback (not in our model) provides additional support to the shares, in

our view. We reiterate our Buy rating with a new £18.70 PT.

We are broadly in-line with consensus — For 2026E, we now expect 3.6% group

ccy growth vs. guidance of 2-4% and VisibleAlpha consensus 3.1%, and we forecast

group core EBIT of c.US$745mn vs. guidance of US$720-770mn and consensus

c.US$740mn. We expect 2H26E to be supported by the expected TYZAVAN 2H26

ramp, continued underlying Branded momentum, and improved Injectables supply

(e.g. clearing some backorders, replenishing of safety stock), partly offset by the

phasing of Branded tenders and S&M expense (as marketing events are shifted to

2H26 due to the ME conflict).

By division: for Injectables we forecast ccy growth of 3.0% (vs. guidance of LSD% /

consensus 1.6%; within this, our OUS estimate are above consensus, while for the

US business we are in-line), and 27.6% core EBIT margin (vs. guidance of 27-28% /

consensus 27.8%). For Branded we are a touch ahead of guidance, with 8.5%

revenue growth (vs. guidance of 6-8% / consensus 8.1%) and 25.5% margin (vs.

guidance of c.25% / consensus 25.4%). For Hikma Rx we forecast flat revenue

growth in-line with guidance / consensus, and 20.0 margin (vs. guidance of 'close to

Buy

Price (10 Aug 26 16:30)

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