GlaxoSmithKline investors set for deep value if they stay patient


Buy and hold GlaxoSmithKline PLC (LSE:GSK) is far from the most radical or unique stock market call you’ll see today, or any other day for that matter, nevertheless, European broker Berenberg says there’s “deep value” for patient investors.

Repeating a ‘buy’ recommendation and upgrading its price target to GBP16.25 from GBP15.70, suggesting around 8% upside to the current price of GBP15.19.

Analyst Kerry Holford, in a note, highlighted Glaxo valuation discount versus its pharma peers and its recent ‘solid’ second quarter.

“GlaxoSmithKline trades on 14.3x 2022 adjusted earnings, versus the EU sector average of 18.3x,” Holford said.

The analyst added: “GlaxoSmithKline delivered a solid Q2 report, beating consensus sales and earnings estimates by 7% and 41%, respectively. FY 2021 guidance was reiterated but, given H1 performance, management now expects to hit the “better end” of the range.”

Berenberg believes contribution from COVID solutions this year should enable the company to deliver broadly flat earnings, on a constant exchange rate basis, whilst predicting a second-half-into-2022 recovery for Glaxo’s Shingrix shingles vaccine and said that two HIV drug regimens are gaining momentum.


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