Liberum upgraded Dechra Pharmaceuticals to ‘hold’ from ‘sell’ and lifted the price target to 4,020p from 4,000p on Wednesday following weakness in the share price.
The broker said the veterinary pharmaceuticals group delivered “strong” interims on Monday.
Incorporating the results, Liberum expects Dechra to deliver “robust” adjusted earnings per share growth in FY22 of 7.5%.
It noted the shares are down 29% year-to-date but said Monday’s announcement “should offer support with trading into the second half remaining strong”.
“Market growth is set to normalise in calendar 2022,” Liberum said. “Given this weakening outlook we think the current forward multiple offers fair value and we retire our sell moving to hold.”
On Monday, Dechra lifted its interim dividend as it posted a jump in profit and revenue. In the six months to the end of December 2021, pre-tax profit rose 59.6% to £53.4m on revenue of £332.4m, up 15.9%. Dechra declared an interim dividend of 12p a share, up 8% on the same period a year ago.
