Lupin share falls 2%; Citi downgrades to Sell, cuts target price to Rs 2,050
Lupin shares fell after Citi downgraded the stock to ‘Sell’ and cut its target price to Rs 2,050. The brokerage expects weaker US base-business sales, margin pressure and limited benefits from new products. Citi also reduced FY27 EPS estimates by 14%. Lupin’s technical indicators remain bearish despite its oversold RSI reading.
On Thursday, Lupin shares experienced a decline of 1.84% after global brokerage Citi downgraded the stock to 'Sell' and reduced its target price to Rs 2,050 from Rs 2,540. The downgrade was attributed to Citi's concerns over Lupin's US business, which has been a significant contributor to the company's growth and profitability. Citi predicts that Lupin's US business sales will decline to around $975 million by FY29, and that margins could fall to approximately 20% from the current 30%.
This would negatively impact the company's earnings growth if new high-margin products do not compensate for the decline in existing products. Despite Apixaban potentially providing some support to Lupin's earnings in FY28, Citi remains skeptical about its ability to drive sustained earnings growth over the long term. Consequently, Citi has also lowered its FY27 earnings-per-share (EPS) estimate by 14%.
Lupin shares have experienced a recent decline of around 10% over the past month, with a market capitalization of approximately Rs 98,497 crore and a 52-week high of Rs 2,529.50. The stock's 14-day Relative Strength Index (RSI) is at 29.3, indicating an oversold zone where the stock may rebound short-term if buying interest returns.
However, Lupin is currently trading below all 8 key Simple Moving Averages, suggesting that the stock is facing broad-based downward momentum.
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