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Shares of GlaxoSmithKline (NYSE:GSK) are trading more than 4.5% lower in pre-market U.S. trading today after UBS analysts downgraded to Sell from Neutral as the pharma giant faces “uncertain times.”
The new price target on the London-listed GSK stock is £13.00 (£1 = $1.1728), down from the prior £18.20, as UBS believes GSK’s valuation is too high. Moreover, the analysts see an “unattractive earnings scenario” after 2026.
“We see two factors posing risks to the earnings base longer term – blockbuster vaccine Shingrix will exhaust its catch-up patient pool in the U.S. around ’27 and HIV product dolutegravir faces patent expiry at the same time,” the analysts wrote in a client note.
These two issues could erase about 20% of revenue for GSK. If the management decides to soften 2027 bottlenecks, this “could mean earnings dilution.”
“And if GSK takes a wait and see approach to the HIV conversion strategy and waiting for improved R&D productivity, that could imply meaningful earnings risk longer term,” the analysts added.
As of 14:25 GMT, London-listed GSK shares are down about 5%.
