Richter to show Q4 profit, downgraded by Erste

Pharma

With BSE blue-chip Gedeon Richter to announce its earning report for the fourth quarter of 2013 next week, speculation is making some local headlines today. A Portfolio.hu poll of analysts shows reportage of double-digit revenue growth is expected; meanwhile, Erste investment advisors have downgraded Richter stock from “Buy” to “Accumulate,” but with a higher target price.

Analysts polled by local business news outlet Portfolio reckon that a “marked increase” in operating profit for the pharmaceutical giant’s quarter will be seen as well.

Meanwhile, analysis from Erste Group released this morning shows Richter being downgraded for investors from “buy” to “accumulate.” On the plus side, the advisors seem to be awaiting short-term gains on the stock’s value, raising the target price on Richter shares to HUF 5,300 from the previously-listed HUF 4,780.

Erste’s lead researcher on the report, Vladimira Urbankova noted in part that “We continue to believe that Richter represents one of the best investment opportunities in the Hungarian equity market. The delisting of its peer Egis, reducing the number of investable titles on the Budapest Stock Exchange, is set to further propel the interest of investors. Thanks to its high export profile, Richter is one of the beneficiaries of the persistently weak forint.”

And on that hot-topic weaking forint, Urbankova also noted the benefit to Richter performance: The upping of target price “was bolstered by the benefits from the weaker forint along with more favorable valuation parameters (i.e. lower government bond yields).”

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