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Investing.com - Macquarie has downgraded Aurobindo Pharma (NSE:ARBN) Ltd. (ARBP:IN) from Outperform to Underperform, while significantly reducing its price target to INR1,010.00 from INR1,700.00.
The downgrade reflects concerns about the sluggish ramp-up and high production costs of Pen G, which Macquarie believes are unlikely to offset the near-term revenue cliff from generic Revlimid.
Macquarie has cut its FY27 earnings estimates for Aurobindo Pharma by 18%, contributing to the substantial reduction in the price target.
The research firm has also reduced its valuation multiple for the pharmaceutical company to 15x price-to-earnings ratio, down from the previous 21x multiple.
This lower multiple reflects what Macquarie describes as "the changing dynamics in the US generic market," suggesting broader challenges beyond company-specific issues.
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