On Wednesday, Deutsche Bank (ETR:DBKGn) reaffirmed its Buy rating on shares of GlaxoSmithKline (NYSE:GSK:LN) (NYSE: GSK (LON:GSK)), with a price target set at £18.50. The endorsement follows the latest prescription trends analysis for some of GSK's key products, which includes new prescriptions (NRX), total prescriptions (TRX), and new brand prescriptions (NBRX) data.
The data, updated to August 16, 2024, indicates a mixed performance among GSK's portfolio. Shingrix, the company's shingles vaccine, showed signs of improvement in recent weeks, yet it remains weak year-to-date. Conversely, Jemperli, a cancer treatment, continued to exhibit a positive sales trajectory. Moreover, this week's report introduced Ojjaara, a new addition to the prescription sales analysis.
For a four-week rolling period, GSK's HIV treatments demonstrated consistent growth with TRX and NRX growing at approximately 4% and 2%, respectively, while NBRX saw about a 7% increase. These figures contribute to the overall assessment of GSK's performance.
The analysis also provided insight into the potential implications for GSK's financial year 2024. It suggested a single-digit downside versus the full-year 2024 consensus estimates for products such as Arexvy, Shingrix, Apretude, and Cabenuva.
On the other hand, drugs like Dovato, Triumeq, Seretide, Nucala, and Trelegy, along with the newly tracked Ojjaara, are projected to have single-digit and double-digit upsides, respectively, when compared to consensus expectations.
In other recent news, GSK has been making significant strides in its operations. The company has reported robust Q2 performance, with a 13% increase in sales to £7.9 billion and a 21% rise in core operating profit to £2.5 billion. This led to an upgraded full-year guidance due to strong performance across all product areas, particularly in specialty medicines and vaccines.
GSK also received a favorable ruling from the Florida State Court in the ongoing Zantac litigation, supporting the scientific consensus that ranitidine does not increase cancer risk. In terms of product development, the FDA approved the expanded use of Jemperli, a key product in GSK's immuno-oncology portfolio, for the treatment of endometrial cancer. This approval was based on the RUBY phase III trial results, demonstrating a significant reduction in the risk of death when Jemperli was used in combination with chemotherapy.
In the realm of analyst ratings, Berenberg reaffirmed its Buy rating on GSK, maintaining the price target at £18.20. However, JPMorgan (NYSE:JPM) adjusted its price target on GSK shares, reducing it to £15.50 from the previous £16.60, while maintaining its Underweight rating on the pharmaceutical giant. These are some of the recent developments for GSK.
InvestingPro Insights
GlaxoSmithKline (NYSE: GSK) has been a subject of keen interest following Deutsche Bank's recent Buy rating, and InvestingPro data provides additional context to the company's financial health and market performance. As of Q2 2024, GSK boasts a robust market capitalization of $88.68 billion, with a strong free cash flow yield as implied by its adjusted P/E ratio of 9.77. This financial stability is further supported by a revenue growth of 7.2% over the last twelve months, indicating a solid trajectory in sales.
InvestingPro Tips highlight GSK's prominence in the pharmaceutical industry, marked by 24 consecutive years of dividend payments and the ability to cover its interest payments comfortably with its cash flows. These factors, coupled with a low price volatility, make GSK an interesting option for investors seeking steady returns. Moreover, analysts predict profitability for the company this year, a testament to its operational efficiency and market strategy.
For readers interested in a deeper dive into GSK's investment potential, InvestingPro offers additional tips on their platform, which could provide further insights into the company's future performance.
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