Friday, December 3

Brokers sharpen knives at Almirall

The price of Almirall it sank to the edge of 11 euros, levels not seen in more than a year and a half. The results presented by the group this Monday gave way to a cascade of downgrades in the valuation in just twenty-four hours.

Up to half a dozen investment firms have downgraded their estimates for Almirall. The unexpected weakness of the margins dampened some accounts that placed the pharmaceutical company very far from the expectations of the market.

The most forceful reduction came from the hand of Deutsche Bank. Its experts directly withdrew the recommendation to buy Almirall and calculated a price target of 11 euros, which practically exhausts the potential for return.

Somewhat more restrained were other valuation houses, although the price cuts passed in all cases of the double digits. A) Yes, Santander Bank lowered the target price by 13.75 percent, while Swiss credit cut it by 14 percent, by 12 percent Oddo and Caixabank.

Weak margins at Almirall

The experts consulted saw clearly that the problem that destroyed confidence in Almirall was the decline in margins.

“We weren’t expecting a fall,” he said Alvaro Arístegui, analyst of Rent 4 Bank. The truth is that higher R&D expenses, together with the increase in general costs to support various product launches, ate away the profitability expected by the market.

In fact, ebitda in the quarter stood at 45 million euros, well below the 52.4 million expected by the consensus of analysts.

This situation “could weigh on profitability in 2022, when the basic EBITDA margin could fall in the range of 20 percent,” they explained to Again it is a lower percentage implicit in the guide for this year, which contemplated a range of between 25 and 27 percent.

The pressure on costs and margins will continue in the coming quarters

In Almirall’s case, it rains in the wet, as the pharmaceutical company also with its results for the first half of the year.

The problem is that the increase in general costs and stable gross margin is a situation that will be repeated in the coming quarters, he said. Almirall at the conference with analysts.

Expenses will increase for various reasons. For example, support for the launch of new products or higher research and development costs, after a period below the historical average, he explained. Arístegui.

That is why the downward revisions are being seen by the consensus of analysts, added the expert from Renta 4 Banco.

However, Arístegui did not touch Almirall’s target price, leaving it at 13.76 euros. “The company has several projects that we do not doubt will boost its long-term results,” added this expert. Among them are drugs such as Ilumetri, Klisyri, Wynzora, and Lebrikizumab.

The dermatology division, for next year

In this regard, economists at Bloomberg Intelligece hope that the post-pandemic recovery of the dermatological market, Almirall’s engine, will extend into next year.

Seasonality slowed Ilumetri’s third-quarter sales, although sales accelerated in October. What’s more, Seysara, your acne drug that deteriorated accounts in the third quarter with a 69 million impacts, showed signs of improvement.

After the latest falls harvested by Almirall, the share reduced the balance of annual earnings to 2.5 percent and is trading at 11.2 euros. The value is already close to the first relevant support between 10.3 and 10.5 euros.

Below 13.3 euros, “weakness remains in the short term,” he said. Eduardo Faus, Renta 4 Banco analyst. Further down, if the punishment were to continue its course, this expert marks the 9.7 euro area as the passage of the long-term bullish guideline.

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