Recipharm (Buy, TP: SEK175.00) - Stronger earnings than expected
Q4 results exceeded our expectations. Sales came in c2% above our forecast and adj. EBITDA was c7% above our forecast. As we expected, the quarter was affected by several one-off items and temporary issues that had an impact on production. Most of these issues should be resolved in Q1 2019 with no material impact on earnings going forward. We reiterate our BUY recommendation and SEK175 target price.Recipharm AB and its subsidiaries is engaged as a manufacture pharmaceuticals and perform contract development services for pharmaceutical companies. Co.'s segment are Manufacturing Solids & Others, Manufacturing Steriles, Development & Technology and Other. The manufacturing segments consist of contract manufacturing of pharmaceuticals. The Development & Technology segment provides services to pharmaceutical companies in the drug development phase for new pharmaceuticals.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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