Cipla Share Price: Citi highlights multiple triggers for 90-day positive catalyst watch

Shares of Cipla

Ltd. gained as much as 4% on Monday, June 22, after brokerage firm Citi reiterated its bullish stance on the pharmaceutical major and placed it on a 90-day positive catalyst watch.

Citi maintained its 'Buy' rating on the stock with a target price of ₹1,700, implying a potential upside of nearly 26% from current levels.

The brokerage believes a series of near-term triggers in the US market could support further upside for the stock. These include the potential approval of generic Flovent (gFlovent), the launch of generic Ventolin (gVentolin), and Cipla's growing presence in the Nintedanib market, where its market share is approaching 50%.

Citi said that the company's recent earnings performance was aided by better-than-expected margins, which were the key driver behind the earnings surprise.

The brokerage also said that Cipla's India business continues to perform well, supported by a recovery in the respiratory segment. Domestic operations remain steady and contribute nearly two-thirds of the company's EBITDA.

Another key catalyst, according to Citi, is the re-inspection of Cipla's Indore manufacturing facility. A favourable outcome and potential USFDA clearance could provide a significant boost to investor sentiment.

On valuations, Citi said that the stock trades at 25 times FY27 estimated earnings and 21 times FY28 estimated earnings. Despite the premium, the brokerage believes the current valuation remains attractive and offers better domestic exposure compared to some of its more richly valued peers.