Stratzy's Stock Idea: Buy Lupin with Target Rs 2760

On January 2, Stratzy issued a buy call on Lupin stock at the current market price of Rs. 2369. The target price for the stock was set at Rs. 2760, indicating a potential upside of approximately 16%. The buy call was based on the belief that the company's strong fundamentals and growth prospects make it an attractive investment opportunity.

About Lupin:

Lupin Limited is an Indian multinational pharmaceutical company headquartered in Mumbai, Maharashtra, India. It is the third-largest generic pharmaceutical company by revenue and the sixth-largest generic pharmaceutical company by market capitalization in the world. Lupin develops, manufactures, markets, and sells a wide range of generic and branded formulations and APIs in over 100 countries. The company's products include anti-infectives, cardiovascular, gastrointestinal, central nervous system, respiratory, diabetology, oncology, and women's health. Lupin has a global workforce of over 20,000 employees and operates 15 manufacturing sites in India, the United States, Mexico, Brazil, and Japan.

52 Week Price Trend:

Lupin shares are currently trading at Rs 2369, close to their 52-week high of Rs 2373.9. The stock has witnessed a significant rally in recent months, driven by positive news regarding its new drug approvals and strong financial performance. However, investors should note that the stock has also been volatile in the past, with significant swings in price. Given the current market conditions and the company's fundamentals, analysts remain cautiously optimistic about Lupin's prospects and recommend a buy rating for the stock.

Stratzy's MOST Analysis:

Lupin's AA- rating from Stratzy's MOST framework indicates that its fundamentals are solid and pose a medium level of risk. This rating is based on an assessment of the company's management, outlook, safety, and trend. Lupin has a strong management team with a proven track record of success. The company's outlook is positive, as it is expected to continue to grow in the future. Lupin's financial position is sound, and it has a strong safety record. The company's stock price has been trending upwards in recent years, indicating that investors are confident in its long-term prospects.

Company's Fundamentals:

Lupin, a pharmaceutical company listed on NSE, exhibits an elevated Stock PE (Price-to-Earnings) ratio of 40.92, indicating that investors are willing to pay a higher price for its earnings compared to the industry average. Its PB Ratio (Price-to-Book) of 6.87 suggests that its market value is nearly seven times higher than its book value, implying a premium valuation. However, Lupin's Dividend Yield of only 0.34% indicates a low level of dividends paid to shareholders relative to the stock's price, making it less attractive for income-seeking investors.

Fundamental and Technical information provided in this blog were last updated on 02 Jan, 2025

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