On Monday, Sumitomo Pharma's (4506:JP) (OTC: DNPUF) stock rating was downgraded by Citi from Neutral to Sell. The new price target is set at JPY460.00. The decision for the downgrade was influenced by the stock's recent performance, which has led to an anticipated total return of -22%.
The downgrade comes despite Citi's improved forecasts for the company, which were adjusted following better-than-expected first-quarter results. These results showed progress in cost-cutting measures and stronger-than-expected US sales of Orgovyx, a medication developed by Sumitomo Pharma.
Citi maintains the price target of JPY460.00 for Sumitomo Pharma's shares. The firm anticipates that the company's full-year guidance could see an upward revision during the second-quarter results. However, the lack of expected positive catalysts following this announcement could lead to a decline in the share price.
The firm's analysis suggests that after the potential upward revision in the company's full-year guidance, there may not be enough positive drivers to sustain the stock's performance. This outlook has prompted Citi to advise a more cautious stance on the pharmaceutical company's shares.
Investors are advised to monitor Sumitomo Pharma's forthcoming quarterly results, as well as any potential market reactions, which may provide further insights into the company's financial health and stock trajectory.
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