DAVY VIEW

We are taken aback by the scale and timing of Clinigen’s profit warning. After a period of rebuilding confidence, management credibility has today, unfortunately, taken another severe blow. Having said this, on our revised numbers, the stock is now trading on 9.0x EV/EBITDA and 11.0x P/E. We cannot see how these low ratings are sustained for a prolonged period given the value currently being placed on healthcare, in particular healthcare services, assets. We move our price target to £8 (from £10), equivalent to 11.0x EV/EBITDA and 14x earnings in FY22.