Morgan Stanley analyst Sarita Kapila maintained a Sell rating on GlaxoSmithKline today and set a price target of p1,290.00.
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Sarita Kapila has given her Sell rating due to a combination of factors impacting GlaxoSmithKline’s financial outlook. One of the primary reasons is the significant reduction in sales projections for Blenrep, a key product, following a negative vote from the FDA’s Oncologic Drugs Advisory Committee. This decision has led to a substantial decrease in expected peak sales from £1.4 billion to £500 million, particularly affecting the potential for U.S. market approval.
Additionally, Kapila has adjusted the earnings estimates for the fiscal year 2025, reducing them by 1-2% due to foreign exchange headwinds and the anticipated decline in Blenrep sales. The outer year earnings have also been cut by 5-6%, which has resulted in a lowered price target of 1290p. These factors collectively contribute to a less favorable risk-reward profile for the stock, justifying the Sell rating.
In another report released on July 15, Bank of America Securities also maintained a Sell rating on the stock with a p1,510.00 price target.