GlaxoSmithKline downgraded to ‘sell’ by Deutsche Bank after results worse than expected

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GlaxoSmithKline PLC (LON:GSK) was downgraded to ‘sell’ from ‘hold’ by Deutsche Bank following a set of disappointing results that present an even more challenging outlook than expected.

Analysts also chopped the target price to 1,150p from 1,400p and remain cautious on the forecast growth rebound in 2022.

READ: GlaxoSmithKline expects more disruption in vaccines arm this year as governments focus on COVID-19

This confidence on next year relies on growth being deferred rather than lost, although that’s not obvious because COVID-19 disruption could pressure new drugs and shingles vaccine Shingrix for many more months.

The German bank said the key to remaining “vaguely constructive” is to think that a pickup in 2022 will be enough to offset near-term pressure and the risk-reward around research and development catalysts.

The weak sentiment was echoed across the City, with broker Oddo also downgrading the stock to ‘neutral’ from ‘outperform’ with a target price cut to 1,490p from 1,770p.

Shares rose 3% to 1,317.8p on Thursday late morning.

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