GSK PLC (LSE:GSK, NYSE:GSK)’s shares jumped 1.8% in early exchanges in London supported by an upgrade by Deutsche Bank.
The German investment bank has put the FTSE 100-listed pharma giant on its ‘buy’ list (previously hold) and increased its price target by 13% to 1,700p.
Analyst Emmanuel Papadakis has taken a look at the prospects for the group’s anti-viral drugs in HIV, RSV and hepatitis B and raised sales and EBITDA forecasts as a result.
The broker noted GSK trades at a 4% dividend/9% free cash flow yield, 9x financial year 2023 P/E for +3/+8% sales/EPS compound annual growth rates through 2022-26 which it thinks leaves GSK looking attractive.
“We think GSK is too cheap if there is any semblance of sustainability through FY27/28, something we now think is probable courtesy of long acting injectables in HIV and RSV, with potential upside from bepirovirsen in HepB.”