Citi upgraded shares of GlaxoSmithKline (GSK:LN) (NYSE:GSK) from Neutral to Buy on Tuesday, while also raising their price target from GBP17.00 to GBP21.00. The upgrade comes after a period of reflection, aligning with recent reports from Citi which have taken a more positive tone towards the pharmaceutical giant.
The decision to update the listing was influenced by impressive results from the DREAMM-7 study for GlaxoSmithKline’s myeloma treatment, belantamab mafodotin (Blenrep). The drug’s earnings potential, which had previously been undervalued, along with a number of positive developments, were the key factors cited for the company’s stock’s more optimistic outlook.
Citi highlighted several areas that contribute to GlaxoSmithKline’s improving outlook. These include favorable outlook for Zantac liabilities, good results and expectations for respiratory syncytial virus (RSV) and Shingrix vaccines, smart business development strategies, and positive outlook for ViiV Healthcare after loss of ‘exclusivity of dolutegravir, a treatment against HIV.
The analyst also highlighted that GlaxoSmithKline’s recent business successes and pipeline progress are factors that position the company to better attract both external talent and additional pipeline assets. Citi’s long-term forecasts for the company’s revenue and adjusted operating profit are now above consensus by 10% and 15%, respectively, reflecting a more optimistic stance on GlaxoSmithKline’s financial future.
Insights from InvestingPro
Following Citi’s upgrade of GlaxoSmithKline (GSK:LN) (NYSE: GSK) to Buy, the InvestingPro platform provides additional insights that can help investors understand the company’s current financial health and market position. Here are some key metrics and tips from InvestingPro:
InvestingPro data highlights GlaxoSmithKline’s strong financial structure, with a market capitalization of approximately $84.07 billion. The company’s P/E ratio stands at a reasonable 13.42, further refined by an adjusted P/E ratio of 11.24 when considering the trailing twelve months starting from Q4 2023. Furthermore, over the same period l The company demonstrated a gross profit margin of 72.34%, indicating strong profitability of its operations.
From the perspective of InvestingPro Tips, two salient points are particularly relevant to the context of the article. First, GlaxoSmithKline’s high shareholder return is noteworthy and suggests that the company has succeeded in returning value to its shareholders. Second, the stock’s low volatility indicates that GlaxoSmithKline’s share price has remained relatively stable, which could be attractive to risk-averse investors.
Additionally, it’s worth noting that GlaxoSmithKline has maintained dividend payments for 24 consecutive years, which aligns with Citi’s positive assessment of the company’s financial future and may be a reassuring factor for income-oriented investors.
For those interested in a more comprehensive analysis, InvestingPro offers a total of 12 recommendations InvestingPro for GlaxoSmithKline, accessible at To further enrich your investment strategy, use the coupon code PRONEWS24 to get an additional 10% discount on an annual or two-year subscription to Pro and Pro+.
This article was generated and translated with the support of artificial intelligence and reviewed by an editor. For further information, please see our T&Cs.