Broker snap: Credit Suisse cautious about 2012 at Glaxo

8th Feb 2012 15:37

Credit Suisse has trimmed its current-year forecasts for pharmaceuticals giant GlaxoSmithKline following yesterday's release of its 2011 results, with the broker saying that a "cautious 2012 outlook may disappoint".Full-year turnover fell 3% to $27,387m, however, on an underlying basis, group sales rose 4% reflecting portfolio breadth and mix, Glaxo said. Pharmaceuticals and Vaccines full-year reported sales fell 4% to £22,192m, as sales of pandemic-related products Avandia and Valtrex plummeted from £2,285m to £507m. Meanwhile Consumer Healthcare sales rose 5% to £5,195m. Credit Suisse says that the results "showed the impact of the tail end of GSK's patent cliff, and a weak disease season, but costs and tax rate kept EPS [earnings per share] in line." The broker's underlying sales forecast for 2012 has been slashed by £270m to reflect a lower level of underlying sales in 2011. Earnings per share estimates have been cut by 4%."Despite internal confidence that the R&D process is delivering more strongly, and that anticipated R&D returns will reach at least 12%, the commercial visibility of the pipeline to investors is still relatively unclear," the broker said.Credit Suisse maintains its neutral rating and 1,430p target price.Shares slipped in afternoon trade on Wednesday, down 0.89% at 1,393.5p.BC