On Tuesday, Citi upgraded shares of GlaxoSmithKline (NYSE:GSK:LN) (NYSE: GSK (LON:GSK)) from Neutral to Buy, while also raising the price target from GBP17.00 to GBP21.00. The upgrade comes after a period of consideration, aligning with Citi's recent reports that have adopted a more positive tone towards the pharmaceutical giant.
The decision to upgrade was influenced by the impressive DREAMM-7 trial results for GlaxoSmithKline's myeloma treatment, belantamab mafodotin (Blenrep). The drug's potential for revenue, which had been previously underappreciated, along with a series of positive developments, were key factors cited for the more optimistic outlook on the company's shares.
Citi highlighted several areas contributing to GlaxoSmithKline's improved prospects. These include a favorable outlook on Zantac liabilities, strong performance and expectations for respiratory syncytial virus (RSV) and Shingrix vaccines, smart business development strategies, and a positive forecast for ViiV Healthcare following the exclusivity loss of dolutegravir, an HIV treatment.
The analyst also noted GlaxoSmithKline's recent commercial successes and pipeline advancements as factors that position the company to better attract both external talent and additional pipeline assets. Citi's long-term forecasts for the company's revenue and adjusted operating profit now stand 10% and 15% ahead of the consensus, respectively, reflecting a more bullish stance on GlaxoSmithKline's financial future.
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