Drugs working for Hikma Pharma as shares propelled higher by rating upgrades from both Citigroup and Jefferies

Hikma Pharmaceuticals PLC (LON:HIK) saw its shares leap over 15% higher today, extending Wednesday’s post-results gains thanks to upgrades in ratings from both Citigroup and Jefferies International.

In late morning trading, Hikma shares topped the FTSE 250 leaderboard, up 15.7% at 1,074.50p.

READ: Hikma Pharmaceuticals posts loss after US write-down

In a note to clients, analysts at Citigroup upgraded their stance on the generic drugs group to ‘buy’ from ‘neutral’ with a new price target of 1,250p.

They said: “ While the outlook for the US Generics industry and Hikma, in particular, remains challenging, we argue this is fully reflected in the share price.”

The analysts added: “The arrival of a new CEO points to guidance being set conservatively. With short interest still relatively high, we like the risk/reward and upgrade to Buy.”

Meanwhile, fellow US investment bank Jefferies upgraded its stance on Hikma to ‘hold’ from ‘underperform’ with an increased target price of 997p from 895p.

Jefferies analysts said they “believe that our stress case to further downside is now unlikely and also that sentiment is now skewed to the upside.”

They added; “Despite challenging industry fundamentals persisting into 2018, we believe guidance gives a floor to expectations, especially in US Gx (generics).

Story by ProactiveInvestors