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On September 26, 2018, Australian Pharmaceuticals Industries (ASX:API) was among the top losers on Australian Securities Exchange. The company didnât come up with any news in the morning. However, Credit Suisse downgraded the stock which could be the primary reason for the strong negative momentum. The broking companyâs recommendation of âunderperformâ from âneutralâ significantly impacted the companyâs stock price. In addition to this, the companyâs price target was reduced from $1.63 to $1.55.
According to Credit Suisse, because of the acquisition of Clearskincare, its stock price witnessed the strong upward momentum and this momentum could exhaust after the company comes out with its results in the month of October 2018. Over the past three months, the stock price of Australian Pharmaceutical Industries has delivered a whopping return of 30.69%. As the company has targeted to enter into the skincare market, its share rose substantially. According to the companyâs management, the recent acquisition would help the company to diversify its operations which could further boost the fundamentals. Thus, the management has a favorable outlook on this acquisition. The company had acquired 50.1% interest in the clinics while the entire 100% was acquired in regard to skincare product business. As far as financing of the acquisition is concerned, it has been done via new medium-term facility amounting to $65 million. [optin-monster-shortcode id="wxhmli4jjedneglg1trq"]
According to Credit Suisse, the investors are over-reacting and they should be more concerned about the companyâs primary business activities which are witnessing challenges. The companyâs retail revenues as well as pharmaceutical benefits scheme or PBS might impact its performance moving forward.
On September 26, 2018, the stock price of Australian Pharmaceuticals Industries stood at A$1.710 at the time of writing. In a single day, the companyâs stock price witnessed 9.763% decline.
Australian Pharmaceuticals Limited ended with the total market capitalization of $933.15 million on September 26, 2018.
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