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Investing.com - Goldman Sachs has raised its price target on Dr. Reddy’s Laboratories Ltd. (DRRD:IN) (NYSE:RDY) to INR1,200 from INR1,175 while maintaining a Neutral rating on the stock.
The adjustment follows Dr. Reddy’s first-quarter fiscal 2026 performance, which showed 11% year-over-year revenue growth and 1% adjusted EBITDA growth, driven by strong results in Russia, EU, and Rest of World markets.
Despite the revenue increase, the company’s adjusted EBITDA margins declined to approximately 25.2%, falling below consensus expectations due to gross margin compression of 350 basis points year-over-year and higher employee costs.
Goldman Sachs has increased its fiscal 2026-2028 earnings per share estimates by 3-14% to account for the first-quarter results, higher Semaglutide sales in Canada, lower research and development expenses, and an updated business outlook.
The investment firm’s revised target price is based on a sum-of-the-parts valuation methodology, though it maintained its Neutral rating citing "limited return potential from current levels."
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