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Investing.com - Jefferies downgraded Dermapharm Holding SE (ETR:DMP) from Buy to Hold on Thursday, while reducing its price target to EUR34.00 from EUR49.00.
The downgrade comes as Jefferies sees limited room for meaningful catalysts in Dermapharm’s medium-term outlook, despite the company’s core Branded Pharma business continuing to grow at a mid-single-digit rate with high margins of 43.9% in the first half of 2025.
Jefferies has cut its estimates for Dermapharm’s Arkopharma unit, which continues to underperform initial expectations. The firm now projects a sales and earnings compound annual growth rate of only 3% through 2027, down significantly from its initial forecast of 7% for sales and 13% for earnings.
While management indicated signs of returning growth for both sales and profits in the second quarter of 2025 following restructuring efforts across sales channels, Jefferies maintains a cautious outlook on Arkopharma’s recovery prospects despite easier year-over-year comparisons.
The strategic realignment in Dermapharm’s Parallel Import business further contributes to what Jefferies describes as a "transitionary" fiscal year 2025, characterized by stalling group sales growth.
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