Syngene International shares drop 3% as UBS downgrades stock to ‘sell’
Syngene International Share Price | Global stock broking company UBS downgraded Syngene International to ‘sell’ from ‘buy’ earlier and cut the target price from ₹875 per share to ₹700 per share, reflecting a potential downside of around 5% from Monday’s closing price.
Syngene International Ltd shares dropped more than 3% on Tuesday after analysts downgraded the stock and cut the target price due to a challenging global environment for the pharma sector and the risk of earnings cuts.
Global stock broking company UBS downgraded Syngene International to ‘sell’ from ‘buy’ earlier and cut the target price from ₹875 per share to ₹700 per share, reflecting a potential downside of around 5% from Monday’s closing price.
Synegne International shares dropped more than 2% to hit a low of ₹711.15 on BSE in morning deals after the downgrade. The stock is trading around 17% lower from its 52-week high of ₹860.20 apiece hit on September 7, 2023.
UBS in a report stated that it downgraded Syngene to ‘sell’ due to the challenging global environment and risk of earnings cuts.
The stock broking firm mentioned that the earlier thesis of easing headwinds for the company’s discovery and dedicated segments (about 60% of revenue) is not playing out.
Subdued VC funding in the biotech space and challenges for large pharma are likely to persist for most of 2024, UBS said while explaining its bearish call.
UBS flagged that investors should brace for soft second half (H2) of FY24E and uncertainties in FY25 guidance.
“Although we like the company's structural story, find the risk-reward unattractive,” UBS stated.
Syngene in October had downgraded the full year growth guidance for 2024 due to a slowdown in the US-based biotech segment.
It expects sales in 2024 to increase in mid-teens compared to the high teens growth projected earlier.
Syngene International shares were trading 2.37% lower at ₹716.30 apiece at 11.01am on Tuesday, January 16.
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