Aspen Pharmacare (JSE: APN) is over 2% higher, this after announcing strategic moves in mergers and acquisitions, expanding its footprint in China by acquiring Sandoz’s Chinese business for up to €92.6 million. This acquisition includes the commercialization rights and intellectual property for Sandostatin, Aclasta, Voriconazole, and a pipeline of future products. This bold step aligns with Aspen’s objective of solidifying its presence in China’s pharmaceutical market, targeting an addition of approximately R 1.8 billion in annual sales.
Simultaneously, Aspen will divest four anaesthetic products in Europe to Sandoz for up to 55.5 million euros, allowing a more focused approach in the region. The company’s forward-thinking strategy positions it for considerable growth opportunities in key global markets, showcasing a year-to-date performance of +38.90%.
Technical Analysis:
The daily chart shows that Aspen Pharmacare’s stock, currently at R188.89, is trading higher within an ascending channel pattern whilst trading above the 20-SMA (green line), 50-SMA (blue line), and 100-SMA (orange line). The recent 20-SMA crossover above both the 50-SMA and 100-SMA signals bullish momentum. However, the RSI, at 67.62, indicates the stock is nearing overbought levels.
Short-term bullish prospects towards the R192.97 resistance level persist, with potential for a push to R200.65. Conversely, a push lower would leave a potential for continued bearish pressure towards the R180.95 support level. A break below the initial support could trigger a run lower and would likely bring the R174.71 and R167.81 support levels into play.
Summary:
Aspen Pharmacare continues its upward trajectory amid strategic acquisitions. The ascending channel pattern suggests short-term bullish opportunities towards R192.97 and potentially R200.65. However, caution is advised near overbought levels, with possible retracements towards support at R180.95.
Sources: TradingView, MoneyWeb, Aspen Pharmacare Holdings Limited, PR Newswire, Seeking Alpha, Reuters, MT Newswire.
Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst
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