This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Trade Parameters
Observations – For
Observations – Against
GSK shares have this week benefited from positive drug news; progress in HIV treatment and protection against generic competition of one of its blockbuster asthma drugs. This helped extend a 3-month rally from March lows. The shares offer an estimated 5% dividend yield which is more than peer AstraZeneca’s 3.8%.
Note that if half year results miss expectations in July, or consensus turns bearish in the run-up, the shares could suffer. Any drug pipeline/trial disappointments could dent investor sentiment as could any new generic competition on key revenue generating treatments. Preference for peer AstraZeneca could see investors move out.
Consensus is bullish with 41% of brokers suggesting Buy (48% hold) and only 10% saying Sell. The share price breakout could encourage some of the 48% of Neutrals to upgrade, which could help the shares. This is supported by the shares trading at the consensus target, and only 54% of broker targets suggesting upside from current levels. Upgrades to price targets may also be in the pipeline after the breakout, which could help the shares. After all, many brokers/analysts have not updated their rec/targets since March/April.
Next Event: Half-year results, 25 July
Latest Broker 12-Month Consensus: 41% Buy, 48% Hold, 10% Sell (full breakdown on request)
Source: DowJones Newswires, Reuters News, Bloomberg or Company Press releases
| Share | 1wk | 1m | 3m | 6m | 1yr | 2yr | 3yr | 4yr | 5yr |
| Perf % | 3.3 | 6.3 | 19.9 | 21.6 | -6.8 | 12.7 | 14.3 | -2.2 | -6.3 |
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