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Investing.com - Morgan Stanley downgraded Hutchison China MediTech Ltd. (NASDAQ:HCM) from Equalweight to Underweight and lowered its price target to $13.75 from $18.00 on Monday. Despite the downgrade, InvestingPro data shows the stock trading at an attractive P/E ratio of 6.43, with a strong financial health score of 3.16.
The downgrade follows Hutchison China MediTech’s first-half 2025 performance, which showed domestic in-market sales declining approximately 37% year-over-year, despite a 25% increase in overseas sales of its FRUZAQLA product.
The company has revised its fiscal year 2025 oncology and immunology sales guidance downward to $270-350 million from the previous estimate of $350-450 million, citing competitive pressures and product life cycle impacts.
Morgan Stanley noted that Hutchison China MediTech faces challenges from its recent restructuring of commercial operations, which has affected domestic sales for key products including fruquintinib, savolitinib, and surufatinib.
The investment bank also pointed out that FRUZAQLA’s commercial momentum appears to have plateaued, with monthly sales stabilizing since May, suggesting more moderate growth in overseas sales going forward.
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