Broker snap: Swine flu to boost Glaxo top line by £600m+

18th May 2009 12:39

Drugs giant GlaxoSmithKline confirmed on Friday it has received orders for 127.9m doses of its anti-viral vaccine from four governments stockpiling medicines to be used in the treatment of the H1N1 flu virus.Broker Charles Stanley has estimated that these orders, along with other potential orders, could amount to a one-off benefit of at least £600m to the company's top line, "with the benefit to group EPS [earnings per share] estimated at circa 3%.""Significantly, given earlier concerns regarding capacity, we note that the perceived timetable for order delivery should not clash with production of seasonal 'flu vaccine for the northern hemisphere winter, orders for which are expected to be completed by August," notes Charles Stanley analyst Jeremy Batstone-Carr.Despite the potential boost to earnings, the broker has maintained its "hold" recommendation for the stock.