Recordati: Credit Suisse downgrades to sell

(CercleFinance.com) - This morning Credit Suisse has downgraded its neutral rating on the share of Italian pharmaceutical Recordati, spent to sell ("underperform"), with a target price of 35 euros (the share is currently trading at 37 euros).


Analysts welcome the group's favourable history in terms of both organic and external growth, which are each around 5%, as well as its ability to quickly make accretive acquisitions.

Since the group is controlled by a private equity fund (CVC), the market anticipates an acceleration in the number of deals. Credit Suisse believes in this assumption, although fears that Recordati is turning to specialty products requiring marketing and R&D efforts, areas in which the group's track record is not the most convincing, the broker says.

Finally, the Recordati share is trading at a 2020 P/E of 21.8x, which represents a premium of 22% relative to its sector.


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