GSK Shares Downgraded at JPMorgan

GSK (LON: GSK) shares gained Tuesday after starting the session lower despite being downgraded to Underweight from Neutral at JPMorgan.

Analyst Richard Vosser also lowered the firm's price target on the stock to 1,350p from 1,600p, stating that he continues to see a “bifurcation” in European pharmaceutical company outlooks in 2023 regarding pipeline readouts and longer-term.

As a result, Vosser said he would avoid companies like GSK and Roche, as he sees downside to 2023 consensus estimates and “potentially challenged” 2025-2030 outlooks. However, the analyst continues to favour companies “which have sustainably higher growth” and “far more” pipeline data points and new launches to drive estimate upgrades.

Last week, the Financial Times reported that GSK is looking to purchase or partner with under-appreciated biotech companies “hiding in plain sight.” GSK's chief commercial officer Luke Miels reportedly said the company is looking at businesses as it works to replenish its pipeline. Although, is Miels said to have stated that GSK is hoping to avoid “getting into a bidding war” by finding under-appreciated targets worth between $1 billion and $2.5 billion.

Following that report, Barclays analyst Peter Lawson said the potential move is positive for the biotech tape. Lawson explained that renewed acquisition activity would help improve sentiment in biotech and the overall index performance and that he sees a positive read-through to oncology companies with late-stage assets.