Broker snap: Glaxo numbers well-received

29th Apr 2010 09:38

Citigroup, UBS and Panmure Gordon remain buyers of GlaxoSmithKline following the drug giant's first quarter numbers yesterday.Sales growth excluding the boost from swine-flu related drugs was 4%, 2 percentage points ahead of consensus, Citi said.The broker, which keeps its 'buy' rating and 1,375p target price on the stock, thinks sustained delivery of top-line growth, fuelled by growth in emerging markets and in its consumer business, will maintain investor interest.UBS, which also has a 'buy' stance on the stock, lifts its target price to 1,525p from 1,475p.It also been impressed by strong emerging markets and consumer healthcare growth at Glaxo and adds that 'with GSK rapidly increasing its exposures to emerging markets and consumer healthcare, and better globalizing its businesses the need to drive growth via pharma R&D is diminishing.'With a 'buy' recommendation and 1,400p target price, Panmure says that Glaxo's results were in line with its forecasts and notes that the stock trades at around 9.7 times 2011 earnings and 8.8 times 2012 earnings.One concern for the broker is disappointing phase III data recently for the lupus disease treatment Benlysta, which showed the efficacy of the drug on patients seemingly waning after a certain period of time.'If the drug's efficacy truly decreases over time, it would represent a significant downgrade risk because lupus is a chronic disease and ideally the drug should maintain its efficacy or even possibly improve it over time,' Panmure said.