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CIMB Equity Research raised its target price for PT Kalbe Farma Tbk to 1,300 rupiah from 1,130 rupiah, saying the pharmaceutical and health products company's ambitious capex plan for next year could provide an upside to revenue growth.
"We raise our full-year 13-14 earnings forecasts and lift our target price... We apply a higher multiple to factor in a better growth outlook. Catalysts are sizable M&A and stronger-than-expected topline growth," the note said on Friday.
"Kalbe acquired a juice manufacturer, Hale International, for 100 billion rupiah. This was followed by an announcement of a JV with liquid milk producer, Milko Beverage. Although these are small transactions for Kalbe, we see positive signs that management is making use of its ballooning excess cash and pursuing growth outside the company."
The research house kept its 'outperform' rating on the stock, saying higher disposable incomes from wage hikes could accelerate consumption of healthcare products, strengthening Kalbe's growth plans.
The drug maker's shares were up 0.88 percent at 1,140 rupiah, while the broader index was down 0.66 percent.
Reporting by Andjarsari Paramaditha; Editing by Anupama Dwivedi