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Investing.com -- Deutsche Bank upgraded Uniphar Plc (IR:UPR) to “buy” from “hold” rating and set a new price target of €5 per share, citing a valuation disconnect tied to its business mix.
Analyst Kane Slutzkin said the market “anchors valuation to its defensive, lower-growth, lower-margin Supply Chain & Retail business, overlooking the growing contribution from its higher-growth, higher-margin Medtech & Pharma divisions.”
Deutsche Bank said its sum-of-the-parts analysis shows the stock trading at about 9x EV/EBITDA compared with a justified multiple of about 11.5x as the business mix shifts, pointing to a potential re-rating. It added that this could support upside toward about €6 per share.
The brokerage described Uniphar as combining a defensive distribution base with higher-growth operations in Medtech and Pharma.
It said Supply Chain & Retail provides resilient cash flow and holds market leadership in Irish pharmaceutical distribution, with additional efficiency potential from a new distribution centre.
The Medtech division was highlighted for its exposure to specialist medical technologies across European healthcare systems, with Deutsche Bank noting it has “doubled EBITDA since 2018,” with further upside expected.