Can the GSK share price soar higher after hitting 17-year high?
The British drug maker wowed investors last month after upgrading its full-year earnings guidance following a strong third quarter performance that sent shares soaring, with analysts believing the stock could climb even higher.
GlaxoSmithKline (GSK) saw its share price close to a 17-year high of £17.82 in the wake of its third-quarter (Q3) results last month, with the drug maker recording strong sales growth, prompting it to upgrade it full-year (FY)earnings forecast.
GSK now expects earnings per share (EPS) to be ‘around flat’ year-on-year (YoY), representing an upgrade from its previous guidance that forecast EPS would decline by between 3% and 5% in 2019.
‘GSK has made further good progress in Q3, with sales growth across all three businesses, and we have today upgraded our full-year EPS guidance,’ GSK chief executive officer (CEO) Emma Walmsley said.
‘This quarter we have continued to strengthen our pipeline and have advanced assets in Respiratory, HIV and, notably, Oncology, where we are on track to file three innovative medicines by year end, following positive pivotal trial data.’
Looking to trade GSK and other pharmaceutical stocks? Open a live or demo account with IG.
Analysts believe GSK shares could see further gains
After its shares hit a 17-year high last month, GSK’s stock haa fallen some 3% to trade at £17.11 levels as of 16:15 GMT on Monday.
But analysts remain upbeat about the prospect of the stock not only returning to record levels but breaking above them.
Analysts at DZ Bank remain the most optimistic, reiterating their ‘buy’ rating for the stock in October and issuing a target price £20 a share. Liberum Capital and Credit Suisse gave a price target of £18.90 and £18 respectively.
Based on the stock’s current price, the three banks believe that GSK’s share price has a potential upside of between 5.2% to 16.8%.
However, Barclays Capital reiterated it ‘equal weight’ rating for the stock, but issued a target price of £16.50, representing a potential downside for the share price of 3.5%
GSK will unveil its fourth quarter results on 5 February.
You can go long or short GSK with IG using derivatives like CFDs.
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only
