Pentecost was a busy time for Galderma. On the Friday before the long weekend, the skincare company made headlines with two major announcements. First, the Zug-based firm presented positive long-term data on its drug Nemluvio. Shortly after, Kepler Cheuvreux published an analyst report on Galderma, which has been listed on the SIX Swiss Exchange since March 2024. The research firm initiated coverage with a “Buy” rating and a price target of CHF 137. While the French firm isn't alone in its optimism - Reuters lists 12 analyst opinions on the dermatology stock, 10 of which recommend buying - Kepler stands out with its high price target. The French analysts value Galderma shares at CHF 137, nearly 20% above the current trading price.
The recent report is titled “Bright Prospects”. According to author Justine Telliez, Galderma is on the cusp of a new growth phase. Specifically, she expects the company to generate nearly USD 7.8 billion in revenue in fiscal year 2028 — about 75% more than in the previous period. The operating margin (Core EBITDA level) is projected to rise from 23.4% to around 30% (see chart). One of the key growth drivers, according to Telliez, is Nemluvio. This drug is used to treat atopic dermatitis (AD) and prurigo nodularis (PN), and is approved in the U.S., EU, UK, and Switzerland. Galderma states that the new data confirms the drug’s efficacy and safety. For AD patients, Nemluvio reportedly led to sustained and increasing improvement in itching and skin lesions. Kepler Cheuvreux believes the drug could account for 20% of the company’s total sales in 2028.
If this forecast proves correct, Galderma’s revenue mix will shift significantly. In 2024, the therapeutic dermatology segment contributed less than one-fifth of total revenue. By the end of the decade, this product area could account for 31%. While the skincare business is expected to lose importance, Injectable Aesthetics will remain the largest business segment. One of the main growth drivers in this segment is the neuromodulator RelabotulinumtoxinA, marketed under the brand name Relfydess. It is already being sold in Germany and Spain, and Galderma is working on launching it in other EU countries, the UK, and Australia. According to the Kepler analyst, this drug strengthens the aesthetics portfolio, helps expand global market share, and contributes to future margin growth. “Galderma combines the scientific advantages of biopharma with the pricing power and capital efficiency of the consumer health sector,” writes Telliez.
Following the positive market reaction to the pre-Pentecost news, Galderma shares are now attempting to break through horizontal resistance around CHF 115. After reaching an all-time high in early February, the mid-cap stock consolidated in this range before dipping again. A V-shaped recovery has brought the stock back near its peak. For traders betting on a breakout and new highs, Leonteq now offers several long Mini-Futures. There are also short Mini-Futures available, which could prove beneficial if the stock bounces off the resistance level and turns downward. For those targeting more stable performance, a new Soft-Callable Barrier Reverse Convertible is available. Regardless of share price movement, investors receive quarterly coupon payments of 8.00% p.a. The barrier is set at 65% of the initial level. As long as Galderma does not fall to or below this mark, the issuer will repay the full nominal amount at maturity. If the cushion proves insufficient, the partial protection lapses. In that case, repayment would be fully exposed to the share price risk of Galderma.
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