Richter Gedeon: near-term headwinds and juggernaut Vraylar (stays HOLD)
Updating our assumptions and rolling over our DCF model, we keep our HOLD on Richter, with a new price target (PT) of HUF 9,435, c.12% upside. Windfall taxes on the 2022-23E revenues, announced on 23 December, and a stronger HUF vs. the EUR/USD and the RUB are the two new headwinds we see for this year, alongside the need for higher marketing and R&D spending. For 2024E-onwards, higher expected royalty income from the Vraylar post-label extension in USD more than offsets the FX headwinds and, overwhelmingly, drives the 7% upgrade in our DCF-derived PT. We also reflect the disposal of the Romanian wholesale/retail during 1H23E, which is not immaterial for our earnings and valuation.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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