Bank of America Securities analyst Graham Parry has maintained their bearish stance on GSK stock, giving a Sell rating today.
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Graham Parry has given his Sell rating due to a combination of factors affecting GlaxoSmithKline’s outlook. Despite a slight beat in the FY24 earnings projections, driven by better-than-expected group sales and operating income, there are concerns about the sustainability of these results. Specific product lines such as Shingrix showed a temporary boost, likely due to one-off adjustments, while others like Arexvy underperformed due to destocking challenges.
Additionally, while the FY25 guidance suggests growth ahead of consensus largely due to favorable foreign exchange impacts and share buybacks, there is skepticism about the company’s long-term growth prospects. The market remains cautious about GlaxoSmithKline’s raised sales targets for FY31, given the high exposure to loss of exclusivity and the perceived weakness in their pipeline. Furthermore, the company’s decision to authorize a significant share buyback has raised questions about capital allocation, especially in light of the need for R&D investments to strengthen the pipeline. These factors contribute to a less favorable long-term growth trajectory, supporting the Sell rating.
In another report released today, J.P. Morgan also maintained a Sell rating on the stock with a £14.40 price target.