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Shares of Sun Pharma rose 3 percent on Friday after UBS raised target price on the stock to Rs 740 from Rs 640. It has maintained a buy call on the stock and sees upside potential of 16 percent.
The global research firm highlighted that it is early among Indian pharmaceutical companies to push forward with a branded portfolio.
The company also enjoys dual levers of specialty and ramp up in generics as well. The brokerage justified the raise in target to potential earnings upgrades ahead.
The stock was in the news recently after global research firm Credit Suisse maintained an outperform rating on Sun Pharma with an increased target of Rs 705 apiece.
It said that the risk mitigation of Absorica (acne medication) should drive rerating on the stock, but a genericisation in December 2020 is a key overhang.
The firm’s analysis also suggests that the company should be able to shift to Absorica market to a new formulation. If the discount on the back of this drug is removed, analysts expect the base business multiple by 10 percent to 23 times.
The stock has gained 17 percent in the past one month, while in the past three days, it has risen 6 percent. At 13:38 hrs Sun Pharmaceutical Industries was quoting at Rs 657.10, up Rs 17.60, or 2.75 percent, on the BSE. The stock touched a 52-week high of Rs 657.50.
Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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