Hikma Pharmaceuticals Plc – Value Analysis (LONDON:HIK) : December 19, 2017

Capitalcube gives Hikma Pharmaceuticals Plc a score of 66.

Our analysis is based on comparing Hikma Pharmaceuticals Plc with the following peers – Dechra Pharmaceuticals PLC, BTG plc, GlaxoSmithKline plc, AstraZeneca PLC, Summit Therapeutics plc, Sinclair Pharma plc and Vectura Group plc (DPH-GB, BTG-GB, GSK-GB, AZN-GB, SUMM-GB, SPH-GB and VEC-GB).

Investment Outlook

Hikma Pharmaceuticals Plc has a fundamental score of 66 and has a relative valuation of UNDERVALUED.

Fundamental Score

Access our research and ratings on Hikma Pharmaceuticals Plc

Company Overview

  • Compared to peers, relative underperformance over the last year is in contrast with the more recent outperformance.
  • It trades at a lower Price/Book multiple (1.37) than its peer median (4.16).
  • The market expects HIK-GB to grow more slowly than its peers and for its median ROE to decline.
  • HIK-GB‘s relative asset efficiency and net profit margins are both around the median level.
  • Change in the company’s annual revenues seems to be coming at the expense of earnings.
  • Over the last five years, HIK-GB‘s return on assets has declined from above median to about median among its peers, indicating declining relative operating performance.
  • The company’s relatively high pre-tax margin suggests tight control on operating costs versus peers.
  • While HIK-GB‘s revenues growth in recent years has been around the peer median, the stock’s below peer median P/E ratio suggests that the market likely sees the company’s long-term growth prospects to be fading.
  • The company’s level of capital investment seems appropriate to support the company’s growth.
  • HIK-GB has the financial and operating capacity to borrow quickly.

Access our research and ratings on Hikma Pharmaceuticals Plc

Leverage & Liquidity

HIK-GB has the financial and operating capacity to borrow quickly.

  • With debt at a relatively low 13.64% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 6.04%), and a well-cushioned interest coverage level of 7.07x, HIK-GB can probably borrow quickly. We classify the company as Quick & Able in terms of its capacity to raise additional debt.
  • Of the 7 chosen peers for the company, only 4 of the stocks have an outstanding debt balance. Companies with no debt include BTG-GB, SUMM-GB and VEC-GB.

HIK-GB has maintained its Quick & Able profile from the prior year-end.

  • HIK-GB‘s interest coverage is similar to last year’s low of 6.75x and remains below the 2014 high of 17.68x.
  • Though its interest coverage has remained relatively stable at 7.07x compared to 2015, its peer median has decreased to 7.24x from 10.72x during this period.
  • Interest coverage rose 3.81 points relative to peers.
  • HIK-GB‘s debt-EV continues to trend upward and is above (but within one standard deviation of) its four-year average debt-EV of 12.55%.
  • While its debt-EV increased to 13.64% from 10.53% (in 2015), its peer median decreased during this period to 6.04% from 11.73%.
  • Relative to peers, debt-EV rose 8.79 percentage points (and is now higher than its peer median).

Access the detailed analysis for Hikma Pharmaceuticals Plc

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Dechra Pharmaceuticals PLC 10.63 2.79 7.42 41.87
BTG plc 0 2.32 No interest exp 999
GlaxoSmithKline plc 20.09 0.64 7.4 40.5
AstraZeneca PLC 18.12 0.94 2.8 21.29
Summit Therapeutics plc 0 4.06 No interest exp 999
Sinclair Pharma plc 1.46 1.13 -9.96 -831.18
Vectura Group plc 0 2.65 -87.75 999
Hikma Pharmaceuticals Plc 13.64 1.9 7.07 43.08
Peer Median 6.04 2.11 7.24 42.47
Best In Class 1.46 4.06 No interest exp 999

Looking for more metrics and analysis for Hikma Pharmaceuticals Plc?

Company Profile

Hikma Pharmaceuticals Plc engages in developing, manufacturing, and marketing branded and non-branded generic pharmaceutical products. It operates through the following segments: Branded, Injectables, Generics, and Others. The Branded segment offers selling of branded generics and in-licensed patented products. The Injectables segment includes manufacturing of sterile injectables. The Generics segment focuses on the U.S. market for oral generics. The Others segment comprises of Arab Medical Containers Ltd., International Pharmaceutical Research Center Ltd. and the chemicals division of Hikma Pharmaceuticals Ltd. (Jordan). The company was founded by Saaid Samih Taleb Darwazah in 1978 and is headquartered in London, the United Kingdom.


The information presented in this report has been obtained from sources deemed to be reliable, but AnalytixInsight does not make any representation about the accuracy, completeness, or timeliness of this information. This report was produced by AnalytixInsight for informational purposes only and nothing contained herein should be construed as an offer to buy or sell or as a solicitation of an offer to buy or sell any security or derivative instrument. This report is current only as of the date that it was published and the opinions, estimates, ratings and other information may change without notice or publication. Past performance is no guarantee of future results. Prior to making an investment or other financial decision, please consult with your financial, legal and tax advisors. AnalytixInsight shall not be liable for any party’s use of this report. AnalytixInsight is not a broker-dealer and does not buy, sell, maintain a position, or make a market in any security referred to herein. One of the principal tenets for us at AnalytixInsight is that the best person to handle your finances is you. By your use of our services or by reading any our reports, you’re agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that AnalytixInsight, its directors, its employees, and its agents will not be liable for any investment decision made or action taken by you and others based on news, information, opinion, or any other material generated by us and/or published through our services. For a complete copy of our disclaimer, please visit our website www.analytixinsight.com.