The first half underlying net loss for Palla Pharma was below Morgans expectations. The result was impacted by a major UK customer manufacturing license loss and the early jettison of a non-opiate contract manufacturing organisation (CMO) contract. Additionally, the supply chain was affected by covid-19 disruptions, explains the broker.
FY20 guidance is unchanged.
Morgans revises down CY20 and CY21 earnings (EBITDA) by -72% and -28%, respectively, after lower sales assumptions and re-basing costs.
Execution remains paramount, notes the analyst, with the pieces in place for significant growth acceleration from the second half, 2020.
The Add rating is unchanged and the target price is decreased to $1.02 from $1.23
Sector: Pharmaceuticals, Biotechnology & Life Sciences.
Target price is $1.02.Current Price is $0.76. Difference: $0.26 – (brackets indicate current price is over target). If PAL meets the Morgans target it will return approximately 25% (excluding dividends, fees and charges – negative figures indicate an expected loss).
