Investment bank Citi has turned bullish on British pharma giant GSK PLC (GB:GSK) for the first time in seven years, citing positive results from the DREAMM-7 phase 3 trial related to the company’s multiple myeloma treatment belantamab mafodotin, or Blenrep. Citi upgraded its rating for GSK, previously called GlaxoSmithKline, to Buy from Hold and raised the price target for the stock to £21 from £17.
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Reasons for Citi’s Bullish Stance
Citi analyst Andrew Baum said that aside from the underappreciated top-line potential of Blenrep, there are many more reasons behind his bullish stance on GSK, including the potential for shingles vaccine Shingrix, RSV vaccine, and the expected settlement of the Zantac lawsuits.
The analyst also highlighted a positive outlook for the ViiV Healthcare business following the loss of exclusivity for HIV treatment dolutegravir and the company’s business development strategies.
Additionally, the analyst belives that GSK’s recent favourable commercial and pipeline developments put the company in a stronger position. It is worth noting that Baum’s long-term revenue and adjusted operating profit forecasts are 10% and 15% ahead of consensus, respectively.
Last month, GSK reported better-than-anticipated fourth-quarter results and issued an upbeat outlook for Fiscal 2024, reflecting its robust vaccines and cancer drugs pipeline. Given the upcoming patent expirations, the British healthcare company has been shifting its focus from HIV drugs toward vaccines and specialty medicines for infections. It aims to launch at least 12 major drugs from 2025.
What is the Price Target for GSK Stock?
With five Buys, five Holds, and two Sells, GSK stock scores a Hold consensus rating. The GSK share price target of 1,718.67p implies a modest upside of about 4%. Shares have risen 16% in the past year.
