Source: Sharecast
Berenberg noted that despite a $2.2bn Zantac settlement announcement last month, and removal of a key overhang, GSK shares had underperformed peers, with investor concerns now centred on vaccines, for which the group's Q3 results showed a repeat of the Shingrix and Arexvy sales decline in Q2.
Nonetheless, Berenberg stated that GSK's specialty medicines division was providing "a solid offset", and the group's CFO reiterated her confidence in achieving FY24 group guidance.
The German bank, which stood by its 'buy' rating on GSK, adjusted forecasts to reflect a more conservative outlook for both its Shingrix and Arexvy assets, resulting in a lower price target. However, Berenberg also noted that GSK was positioned to launch five assets in 2025, two of which have "multibillion peak sales potential", in its view.
"Although the path ahead will not be quick or easy for GSK, the extent of the valuation discount is such that even limited pipeline progress can help build momentum. GSK’s dividend yield also provides support here," concluded the analysts.
Reporting by Iain Gilbert at Sharecast.com