Long-term value is “emerging” at GlaxoSmithKline plc (LON:GSK), according to the German bank Berenberg, which upgraded the stock.
It notes there may be a little bit of short-term pain for the HIV business, ViiV, with a new competitor product in the space set to be launched by US biotech Gilead.
However, Berenberg points out the consumer division is “performing well”, while vaccines is a “high quality business”.
“The pharmaceuticals unit is viewed with scepticism, including poor past R&D productivity (although our analysis suggests perception may be worse than reality),” investors were told.
Pharma division prioritised
“However, this is already in the price and we are encouraged that new CEO Emma Walmsley has prioritised commercial execution in this division.”
Berenberg’s share price target moves to £18.85 from £18.50, prompting a recommendation upgrade to ‘buy’ from ‘hold’.
At 10am, the stock was changing hands for £16.35, up 1% on the day.
Of the 16 analysts logged as covering GSK by the Broker Forecasts site, eight are in the ‘buy’ camp; while three have ‘sell’ recommendations. The remainder reckon the stock is fully valued. The consensus price target is £17.33.