Hypera (HYPE3): the balance sheet points that reinforce the positive outlook for the stock after a 50% rise in the year

Hypera (HYPE3), owner of brands such as Dramin, Benegrip and Buscopan, posted strong results in 2Q22, with net income of R$456 million. With that, the shares closed the session this Friday (29) with gains of 5.19%, at R$ 42.59. As a result, it accumulates gains of around 50% in the year, the second highest rise on the Ibovespa in the period.

Net revenue increased 26% in the year mainly due to a 25% increase in sell-out, sales of products from pharmacy shelves to consumers, organic. Adjusted EBITDA margin (Ebitda, or earnings before interest, taxes, depreciation and amortization, over net income) grew 1.4 percentage points (pp) as the company continues to capture synergies from recent acquisitions, XP highlights.

Operating cash conversion was also a highlight, totaling 79% of adjusted Ebitda. “The company continues to present good results quarter after quarter, corroborating our positive view in relation to the shares”, evaluate the analysts of the house.

Revenues benefited from (i) revenue of R$128 million in the institutional market (versus R$50 million in 2Q21) – which in turn was positively impacted by immunoglobulin sales – and (ii) revenue of R$54 million from Sanofi brands.

Eleven Financial also points out that the gain of 6.5 percentage points in sales above market growth results in a potential gain of market share (market share), which was favored by the performance of the months of May and June, with the increase in cases of covid and flu.

In a conference call, the pharmaceutical company highlighted that the equity gains acquired in the second quarter are sustainable, given the investments made in recent years in research and development, increased production capacity and acquisitions. “We are confident that the market share gains are sustainable in the long term,” said Breno de Oliveira, CEO of Hypera.

Among the product highlights, the launch of products with Power Brands contributed to Hypera’s portfolio and increased sales. “In addition, we understand that gross and Ebitda margins did not suffer from the increase in costs and inflation of materials, which contributes to a relief in the net margin, which was pressured by financial leverage, and the increase in interest rates”, evaluate the Eleven analysts.

“Thus, with results slightly above the consensus, we maintain our buy recommendation, with a target price of R$42 (up potential of around 4% compared to the previous day’s closing) and we should review our numbers soon”, they point out.

Bank of America assesses that it continues to see a rich set of opportunities for Hypera, despite the considerable performance of the stock price in the year to date.

“We recognize a very strong range of new products, adding opportunities in therapies in the rejuvenation of acquired brands and molecules. The recent acquisitions also look better than planned, and we point to consolidation as an ongoing opportunity to create value for Hypera. The increase in the price ceiling in Brazil in 2022 of 10.9% also seems to have good adherence and allow the Hypera to recover the margin”, they evaluate. Analysts have a buy recommendation for the shares, with a target price of BRL 51 (upside of 26%).

(with Reuters)

Purchase opportunity? XP Strategist Reveals 6 Cheap Stocks to Buy Today. Watch here.

About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

Check Also

Cheap and noisy: how international investors see Brazil

Among international investors, the 2022 election does not generate the fear and concern that other …