Veterinary products specialist, Dechra Pharmaceuticals (GB:DPH) reported its annual results for 2022, with by strong growth in its portfolio of products, combined with international expansion, and the acquisitions of Piedmont and Med-Pharmex.
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The company’s revenue grew by 13.8% to £681.8 million, with strong growth from the North American markets. Its underlying operating profits increased by 9.4% to £174.3 million.
Despite the positive numbers, the market reacted negatively and the stock went down by almost 10% on Monday. The shares have fallen by 35% so far this year.
Analysts worry about the company’s rising costs affecting profits.
The company spent almost £400 million on acquisitions of Piedmont Animal Health and Med-Pharmex in 2022. The company believes these acquisitions will strengthen its position in the U.S. market, along with a promising pipeline of products.
Dechra announced a dividend of 44.89p per share was announced during the results, which is 10% higher than the previous year’s.
What are the analysts saying?
Victoria Scholar, head of investment at Interactive Investor, said, “The fundamentals of the business remain robust with no sell recommendations on the stock from the analyst community. But the macroeconomic challenges of inflation and the risk of recession combined with the backdrop of volatile financial markets suggest the path ahead continues to look bumpy.”
Adam Vettese, an analyst at eToro, commented, “While Dechra’s consistent growth may be enough to tempt some people to snap up its shares, its lofty valuation could be a deterrent for many investors.”
Dechra Pharmaceutical share price forecast
According to TipRanks’ analyst rating consensus, DPH has a Moderate Buy rating, based on two Buy recommendations.
The DPH stock forecast is 4,587.5p, which is 46% up from the current price level. The analyst price targets range from a low of 4,200p per share to a high of 4,975p per share.
Conclusion
With two major companies acquired this year, the company remains confident in its outlook. With the U.S. being the largest animal health market, its acquisition of Med-Pharmex will provide an extra edge in the market.
