GlaxoSmithKline (Egypt): Price momentum supported by strong fundamentals

GlaxoSmithKline (Egypt) relative valuation is UNDERVALUED and it has a fundamental analysis score of 66.

Our analysis is based on comparing GlaxoSmithKline (Egypt) with the following peers – Egyptian International Pharmaceutical Industries Co., Arab Drug Company for Pharmaceuticals and Chemi cal Industries, May & Baker Nigeria Plc and Memphis Pharmaceutical & Chemical Industries (PHAR-EG, ADCI-EG, MAYBAKER-NG and MPCI-EG).

GlaxoSmithKline (Egypt) has shown underwhelming performance over the last one year while growing strongly over the last month. GlaxoSmithKline (Egypt)’s price momentum over the last month, at 18.37% has been better than that over the last year, which was -11.48%. Also from a peer group perspective, GlaxoSmithKline (Egypt) has performed better, since the peer group performance was -1.32% over the last month.

Company Snapshot

  • From a peer analysis perspective, relative outperformance last month is up from a median performance last year.
  • GlaxoSmithKline S.A.E.’s current Price/Book of 0.85 is about median in its peer group.
  • BIOC-EG‘s operating performance is relatively good compared to its peers. The market currently does not expect high earnings growth relative to its peers but seems to expect the company to maintain its relatively high rates of return.
  • BIOC-EG‘s relatively high profit margins are burdened by relative asset inefficiency.
  • Changes in annual earnings are in line with its chosen peers but lags in terms of revenue, implying the company is cost conscious and selective about spending for growth.
  • Over the last five years, BIOC-EG‘s return on assets has improved from median to better than the median among its peers, suggesting the company has found relative operating advantages.
  • The company’s relatively high pre-tax margin suggests tight control on operating costs versus peers.
  • While BIOC-EG‘s revenues growth has been below the peer median in the last few years, the market still gives the stock a P/E ratio that is around peer median and seems to see the company as a long-term strategic bet.
  • The company’s level of capital investment seems appropriate to support the company’s growth.
  • BIOC-EG currently does not have any debt.
  • Our analysis rates GlaxoSmithKline (Egypt) as UNDERVALUED relative to its peers.

Share Price Performance

From a peer analysis perspective, relative outperformance last month is up from a median performance last year.

While BIOC-EG‘s change in share price of -11.48% for the last 12 months is in line with its peer median, its more recent 30-day share price performance of 18.37% is above the peer median. This suggests the company’s performance has improved more recently relative to peers.

Share Price Performance

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Leading, Fading, Lagging, Rising

Relative Valuation

Relative Valuation
Fundamental Score

GlaxoSmithKline (Egypt)’s price of EGP 10.18 is lower than CapitalCube’s implied price of EGP 11.85. CapitalCube believes that at these levels, GlaxoSmithKline (Egypt) is undervalued and has upside potential. Over the last 52 week period, the stock has fluctuated between EGP 7.75 and EGP 11.51.

Valuation & Peer Metrics

A complete list of valuation metrics is available on the company page.

Company Profile

GlaxoSmithKline (Egypt) engages in the pharmaceutical and healthcare industries. Its business operations are carried out through the production, packaging, marketing, sale, and distribution of medicines and other pharmaceutical products. The firm also involves in the production, and in some cases, the sale and distribution of products for other pharmaceutical companies. The company was founded in 1981 and is headquartered in Cairo, Egypt.

Disclaimer

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