GSK share price: Investors eyeing China sales update

on Feb 4, 2014
Updated: Apr 9, 2020
Listen, Tuesday, February 4: With UK pharma giant GlaxoSmithKline Plc (LON:GSK) scheduled to update markets on its fourth-quarter performance tomorrow, investors are likely to focus on the group’s sales in China which took a severe hit in the third quarter.

Overall, analysts expect the company to post a one percent increase in full-year revenue.
GSK’s share price has eased about 0.3 percent in London trading so far today.

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**GKS revenue expectations**
The Scotsman has reported that consensus estimates are for a one percent increase in full-year revenue at GSK to £26.6 billion. The FTSE 100 company is also largely expected to report that sales in China took a smaller hit in the final three months of the year than in the third quarter when they tumbled 61 percent, dragged down by an ongoing bribery probe into the company’s operations in the country.

(GSK share price drops with China sales hit by bribery probe)
The Telegraph has quoted Deutsche Bank analyst Mark Clark as expecting GSK’s China sales to have slid 30 percent in the fourth quarter. Clark also sees the pharma giant posting a one percent rise in revenues on account of stronger vaccine sales in emerging markets. The Telegraph also quoted Panmure Gordon analyst Savvas Neophytou as expecting unfavourable currency movements to have knocked three percentage points off GSK’s top line sales growth in the fourth quarter, leaving revenues flat on the year.

Fitch Ratings yesterday said in a statement published by Reuters that it expected results for European pharmaceutical companies to continue to be affected by generic competition and government cost-containment policies in Europe. The agency however sees emerging markets and innovation remaining as the industry’s two main drivers of growth.

GSK is also expected to announce plans for launching late-stage clinical trials on ten new drugs over the next two years including medicines in the company’s key areas of cancer and respiratory diseases. (GSK share price: Drugmaker reportedly set to add ten drugs to pipeline)

**Societe Generale reiterates ‘buy’ rating**
Analyst Ratings Network reported yesterday that Societe Generale had reiterated its ‘buy’ rating on GSK with a price target of 1,960p. Analysts at Credit Suisse, who have an ‘underperform’ rating on the UK pharma giant, last week boosted their price target from 1,600p to 2,400p. JPMorgan Chase & Co reaffirmed their ‘neutral’ rating on GSK with a price target of 1,750p, while S&P Equity Research upgraded the company to a ‘hold’ boosting their price target from 1,400p to 1,680p.
GSK currently has an average price target of 1,766.53p and a consensus ‘hold’ rating.
**As of 15:01 UTC, buy GSK shares at 1564.50p.**
**As of 15:01 UTC, sell GSK shares at 1564.00p.**

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