a comprehensive review, page-3

SIP SIGMA PHARMACEUTICALS LTD Overnight Price: $1.75
ABN Amro rates SIP as Hold - Target $1.98 (was $2.46). With management revising down earnings guidance for FY08 by 10-15% the broker has adjusted its forecasts accordingly, while it now is adopting a wait and see approach on the company's growth strategy before it will consider turning more positive.


Target price is $1.98 Current Price is $1.75 Difference:$0.24 - (brackets indicate current price is over target). If SIP meets the ABN Amro target it will return approximately 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in January. ABN Amro forecasts a full year FY07 dividend of 8.70 cents and EPS of 10.60 cents. At the last closing share price the estimated dividend yield is 4.99%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.46.

Market Sentiment: 0.2

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Aspect Huntley rates SIP as Downgrade to Hold from Buy - Aspect Huntley has changed its mind and downgraded the stock following lower earnings guidance.
Given the downgraded earnings guidance partly reflects stronger competition in the generics market a more cautious stance is warranted in its view.


Current Price is $1.75. Target price not assessed.

The company's fiscal year ends in January. Aspect Huntley forecasts a full year FY07 dividend of 8.70 cents and EPS of 10.20 cents. At the last closing share price the estimated dividend yield is 4.99%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.11.

Market Sentiment: 0.2

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Citi rates SIP as Revised to Buy, High Risk from Medium Risk - Target price has fallen to $2.09 from $2.58 following profit warning by management.
Citi analysts suggest smaller player will be pushed out in the tough generics industry. The report contains sentences such as "If SIP as leader in this sector cannot make appropriate returns on capital invested, then the industry as a whole looks in danger of disappearing from the Australian landscape."


Target price is $2.09 Current Price is $1.75 Difference:$0.35 - (brackets indicate current price is over target). If SIP meets the Citi target it will return approximately 20% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Market Sentiment: 0.2

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Credit Suisse rates SIP as Downgrade to Neutral from Outperform - Target $1.95 (was $2.95). The broker has downgraded its rating following management's revised earnings guidance that suggests a flat result in FY08.
This reflects tougher competition in generics and an unlikely resolution of CSO payments, the broker suggesting it also means the market's confidence in the ability of the management team will have fallen.

Earnings estimates have been cut by 15.2%, 14.4% and 19.0% respectively in FY08-FY10.


Target price is $1.95 Current Price is $1.75 Difference:$0.21 - (brackets indicate current price is over target). If SIP meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in January. Credit Suisse forecasts a full year FY07 dividend of 8.80 cents and EPS of 10.90 cents. At the last closing share price the estimated dividend yield is 5.04%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.01.

Market Sentiment: 0.2

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AddedDeutsche Bank rates SIP as Downgrade to Hold from Buy - Target $1.90 (was $2.80). Broker has revised its rating and earnings to reflect lower guidance from management.

Target price is $1.90 Current Price is $1.75 Difference:$0.16 - (brackets indicate current price is over target). If SIP meets the Deutsche Bank target it will return approximately 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in January. Deutsche Bank forecasts a full year FY07 dividend of 10.00 cents and EPS of 13.00 cents. At the last closing share price the estimated dividend yield is 5.73%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.42.

Market Sentiment: 0.2

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JP Morgan rates SIP as Neutral - The broker is not buying management's "vague" explanation for the profit downgrade, and suggests its credibility is in question. Thus the broker sees further FY08 risk and has slashed earnings by 25% in FY08 and 10-15% beyond.
Target falls from $2.65 to $2.05 and the broker suggests that while the stock is probably trading at fair value, there's not a lot of immediate upside.


Target price is $2.05 Current Price is $1.75 Difference:$0.31 - (brackets indicate current price is over target). If SIP meets the JP Morgan target it will return approximately 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in January. JP Morgan forecasts a full year FY08 dividend of 8.00 cents and EPS of 8.80 cents. At the last closing share price the estimated dividend yield is 4.58%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.83.

Market Sentiment: 0.2

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Macquarie rates SIP as Downgrade to Neutral from Outperform - The broker has downgraded its rating following revised earnings guidance from management which now stands at a flat profit result in FY08 compared to previous expectations of an increase of 10-15%.
The broker points out it has little confidence in its earnings estimates, which supports its more cautious view.


Target price is $1.85 Current Price is $1.75 Difference:$0.11 - (brackets indicate current price is over target). If SIP meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in January. Macquarie forecasts a full year FY07 dividend of 8.80 cents and EPS of 11.00 cents. At the last closing share price the estimated dividend yield is 5.04%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.86.

Market Sentiment: 0.2

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Merrill Lynch rates SIP as Neutral, Medium Risk - Is a title such as "Challenging times ahead" an understatement when it comes to Sigma?
Merrill Lynch analysts are of the view that the recent sell-down following another profit warning is not an opportunity for investors. Challenges ahead for FY08 will keep the share price down, the analysts believe.

To keep things exciting for Sigma management, the analysts believe "competitive pricing" in the generics industry is not going away in the foreseeable future.


Current Price is $1.75. Target price not assessed.

The company's fiscal year ends in January. Merrill Lynch forecasts a full year FY08 dividend of 11.00 cents and EPS of 11.10 cents. At the last closing share price the estimated dividend yield is 6.30%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.72.

Market Sentiment: 0.2

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UBS rates SIP as Buy 2 - Following the profit warning the broker has downgraded earnings by 9.6% and 12% in FY08-09. The broker considers there is likely to be ongoing pressure on generic prices but the market has largely oversold and hence Buy remains.
Target falls from $3.05 to $2.60.


Target price is $2.60 Current Price is $1.75 Difference:$0.86 - (brackets indicate current price is over target). If SIP meets the UBS target it will return approximately 49% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in January. UBS forecasts a full year FY08 dividend of 7.00 cents and EPS of 13.00 cents. At the last closing share price the estimated dividend yield is 4.01%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.42.