GSK Upgraded to Buy at Berenberg as Analyst Turns Bullish on Pipeline

GSK shares were in focus on Tuesday after Berenberg upgraded the pharmaceutical giant to Buy from Hold, lifting its price target to 2,200p from 2,000p and signalling a marked shift in sentiment toward the stock.

Berenberg analyst Kerry Holford said the firm is “increasingly optimistic” about GSK’s growth outlook, pointing to the company’s recent business development activity and building pipeline momentum as key drivers of the more constructive stance.

Holford also flagged the diminishing drag from dolutegravir, GSK’s blockbuster HIV treatment that has faced generic competition risk. As the drug “becomes progressively diluted” within the group’s broader revenue mix, the analyst argued that the valuation discount GSK shares have traded at relative to sector peers is “no longer justified.”

The upgrade lands as GSK shares hover around the 1,850p mark, having pulled back from highs near 1,970p in early August. The stock closed at 1,854p on Monday and was little changed in early trading Tuesday, last quoted around 1,854p, essentially flat on the session. Shares have been volatile over the past six weeks, swinging between roughly 1,770p and 1,970p amid broader sector rotation and stock-specific newsflow.

Berenberg’s revised target of 2,200p suggests the broker sees potential upside of close to 20% from current trading levels, a notable vote of confidence at a time when investors have questioned the durability of GSK’s growth story beyond its HIV franchise.

The upgrade adds to a broadly improving narrative around GSK’s specialty medicines and vaccines pipeline, as the company leans on business development deals to diversify revenue streams ahead of anticipated patent-related headwinds. Investors will be watching for further read-through from upcoming trial data and deal announcements to gauge whether the re-rating case gains further traction across the sell-side.