HSBC Lifts GSK Stock Rating as Management Change Signals Pipeline Turning Point

HSBC upgraded GSK (LON: GSK) (NYSE: GSK) to Hold from Reduce on Monday, raising its price target to 1,860 pence from 1,500 pence, citing signs that new management is taking a more proactive approach to rebuilding the pharmaceutical giant’s pipeline.

The bank told investors in a note that the key concern hanging over GSK has long been a significant patent cliff and insufficient pipeline strength to replace the earnings power set to be lost when key drugs lose exclusivity.

However, HSBC said the change in management and a recent willingness to reinvest in the pipeline to drive future growth suggest the company “might be turning a corner.”

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The upgrade follows a similar move by Kepler Cheuvreux in May, when analyst Nicolas Pauillac lifted GSK from Hold to Buy with a price target of 2,516 pence, arguing the stock’s discount to peers was difficult to justify given improving operational delivery.

Pauillac noted GSK trades at approximately 10 times 2027 earnings estimates, a clear discount to the peer average of around 14.8 times, while around half of sell-side ratings remain at Hold. He said that scepticism “contrasts with the company’s improved operational delivery, repeated upgrades to management’s long-term outlook, and a risk-adjusted £40 billion revenue ambition for 2031.”

GSK shares slipped 1.6% on Monday but remain up 8.5% year-to-date. According to TradingView data, five of 20 analysts rate the stock a Buy, 12 a Hold, and 3 a Sell.