Shares in Hikma Pharmaceuticals (HIK) tumbled 16% after the company posted a disappointing FY26 sales and profit outlook. The FTSE 100 stock dropped to £13.87 on the update, its lowest level in more than three years.
| Share price: £13.87 (-16%) | PE: 11.1x |
| Market cap: £3bn | Yield: 3.6% |
Guidance disappoints
The company, which makes treatments for cardiovascular diseases, infections, cancers and diabetes, made the forecasts alongside its FY25 results. It also unveiled senior leadership changes intended to give the group ‘more agility and greater accountability’.
For FY25, the firm reported sales of $3.35 billion, up 7% and in line with market expectations. Core operating profit increased 3% to $741 million, again in line with expectations, while EPS of 228c also matched forecasts.
However, revenue and profit guidance for FY26 was below analysts’ forecasts, prompting the sell-off. Rather than 5%-plus revenue growth, Hikma guided for 2% to 4% growth this year.
For core operating profit, the firm issued a range of $720 million to $770 million against a consensus of $784 million. At the mid-point of the range, profit would be flat on FY25 and some $30 million below the consensus.
The news completely overshadowed the announcement of a $250 million share buyback. The board said the buyback was sized ‘to maintain balance sheet efficiency whilst leaving significant headroom for continued investment opportunities’.
Management shake-up
The firm also announced several senior management changes, with Said Darwazah stepping down as chairman to focus on the CEO role. Darwazah stepped in as interim CEO in December 2025 after Riad Mishlawi resigned following a profit warning a month earlier.
Victoria Hull becomes chair, with Mazen Darwazah keeping his role as vice chair and taking up the post of deputy CEO MENA.
Chief finance officer Khalid Nabilisi steps down to become deputy CEO of the North American and European business. The board has initiated a search for a new CFO but group financial controller Areb Kurdi is stepping into the breach.
Hafrun Fridriksdottir, president of Hikma Rx and head of R&D, adds president of the US business to her roles. Fridriksdottir will be responsible for all Injectables sales in the US effective immediately.
It’s not often a FTSE 100 stock gets whacked for 16%, much less a ‘dull defensive’ like Hikma. However, today’s disappointment follows November’s cut to guidance so investors have every right to feel agrieved.
While thee reaction feels completely out of proportion to the 4% projected profit miss for this year, it does provee one thing. The outlook is all that matters to investors right now. Even if you meet or beat FY25 forecasts, unless you raise the bar for FY26 even the dullest business can be de-rated in an instant.
Read the press release here: https://www.hikma.com/investors/
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