Berenberg upgrades GSK to 'buy', raises target price

15th Sep 2026 07:24

(Sharecast News) - Analysts at Berenberg upgraded drugmaker GSK from 'hold' to 'buy' on Tuesday and lifted their target price on the stock from £20 to £22, saying recent business‑development activity and pipeline momentum had strengthened the firm's long‑term growth outlook and left its valuation discount looking excessive.

Berenberg said GSK's evolution was "undervalued", noting that 10 of its 11 novel phase‑III assets had been sourced externally under new chief executive Luke Miels. It argued that six late‑stage programmes each carried potential peak sales of at least £2bn, helping to restock the pipeline and improve returns on R&D.

The German bank forecasts £39bn of sales in 2031, ahead of consensus and supported by recently launched products and underappreciated opportunities in bepirovirsen, Nuvalent's lung‑cancer assets and GSK/Hansoh ADCs. It added that margins should remain "stable to improving" despite future erosion in oral HIV brands, helped by ongoing cost‑saving measures.

Berenberg stated upcoming catalysts include US decisions on bepirovirsen and neladalkib by year‑end, alongside key readouts over the next 12 months for Ris‑Rez in second‑line SCLC, quarterly HIV dosing, and several mid‑stage respiratory and allergy assets.

The broker added that GSK's valuation gap had become too wide, with the shares trading on 9.6x 2027 earnings versus 12.4x for European peers, and at a 22% discount on enterprise value-to-net present value ratio.

Reporting by Iain Gilbert at Sharecast.com