GSK share price outperforms as Barclays turns bullish on pharmco

Broker argues concerns are now fully priced in

GSK share price outperforms as Barclays turns bullish on pharmco

Shares in GlaxoSmithKline (LON:GSK) have jumped in London in today’s session as analysts at Barclays turned bullish on the British drugmaker, pointing to progress in HIV and shingles. The analysts further argue that any risks are now priced in, Proactive Investors reports.

As of 14:29 GMT, GSK’s share price had added 0.81 percent to 1,366.20p, outperforming the broader UK market, with the benchmark FTSE 100 index having slipped into the red and currently standing 0.29 percent lower at 7,733.15 points. The group’s shares have lost just under 12 percent of their value over the past year, as compared with an over seven-percent rise in the Footsie.

Barclays turns bullish on GSK

Barclays has lifted its stance on GSK from ‘equal weight’ to ‘overweight’ today, hiking its price target on the shares to 1,650p. Proactive Investors reports that the broker’s previous recommendation was due to caution over declining sales of the pharmco’s flagship respiratory drug Advair, optimistic forecasts for its HIV division ViiV Healthcare, a weak pipeline as well as dividend uncertainty.

With GSK’s share price having tumbled by more than a fifth since summer, however, analyst Emmanuel Papadakis reckons that those concerns are now ‘fully priced in’. The analyst further notes that consensus forecasts for the HIV franchise have been negatively revised by 18 percent or so in recent months meaning that, for the first time, consensus now stands modestly behind Barclays’ own estimates.

Proactive Investors notes that apart from HIV, Papadakis also likes GSK’s new shingles vaccines, Shingrix, which he expects to emerge as a ‘major growth driver’ in coming years.

Other analysts on GSK

Jefferies also remains bullish on the blue-chip pharmco, having reiterated its ‘buy’ rating on the shares yesterday, valuing the stock at 1,500p. According to MarketBeat, the FTSE 100 group currently has a consensus ‘hold’ rating and an average price target of 1,547.11p.

Today’s news comes after GSK’s chief executive Emma Walmsley recently said that the blue-chip pharmco would have a look at Pfizer Inc’s consumer products business, but would not overpay for the assets.

As of 15:02 GMT, Wednesday, 17 January, GlaxoSmithKline plc share price is 1,364.80p.

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