Shire share price rises ahead of second-quarter results

on Aug 1, 2016
Updated: Oct 21, 2019

Shares in Shire (LON:SHP) have gained ground in today’s session, outperforming the broader London market, with the blue-chip rare disease specialist expected to post a rise in revenues when it updates investors on its second-quarter performance tomorrow. Analysts at Deutsche Bank, however, expect the group’s results to be complicated by the pharmco’s merger with US peer Baxalta, completed during the quarter.

As of 14:16 BST, Shire’s share price had added 0.88 percent to stand at 4,914.00p, outperforming the benchmark FTSE 100 index which has slipped into the red and is currently 0.39 percent worse off at 6,697.92 points. The pharmco’s shares have lost more than 13 percent of their value over the past year, but have recovered some four percent in the year-to-date.
Deutsche Bank expects Shire’s second results to be complicated by the group’s merger with US blood specialist Baxalta, completed on June 3, with the FTSE 100 group likely to focus on possible updated synergy targets and guidance.

“However, we expect the company to report pro forma combined revenue growth of 10 percent and our forecasts imply pro forma non generally accepted accounting principles (GAAP) earnings before interest and tax (EBIT) growth of eight percent,” the analysts were quoted as saying, adding that Shire’s second-quarter results should also benefit from strong year-on-year growth in US prescriptions of central nervous system stimulant Vyvanse, and ulcerative colitis treatment Lialda.
Baxalta’s revenues meanwhile are expected to have risen 11 percent at constant exchange rates, reflecting growth in the company’s Immunology and Haematology divisions, along with a positive contribution from the portfolio acquisition of blood cancer drug Oncospar.
Analysts remain bullish on Shire in the run-up to the group’s second-quarter results, with BNP Paribas reiterating its ‘outperform’ rating on the stock today, with a price target of 5,700p. JPMorgan Chase & Co continues to see the London-listed pharmco as an ‘outperform’, without specifying a valuation on the shares.
As of 15:08 BST, Monday, 01 August, Shire PLC share price is 4,903.50p.