Broker tips: AstraZeneca, GSK, Oxford Instruments

18th May 2026 13:18

(Sharecast News) - Analysts at Citi have reiterated a 'buy' rating on AstraZeneca and a 'neutral' on GSK following the European pharma sector's first-quarter earnings season.

The bank believes AZN has the best growth and pipeline across its European pharma coverage, and sees the recent retreat in its share price as a buying opportunity ahead of a "busy second-half catalyst-path".

The company has phase III trials of drugs such as Wainua, camizestrant and Datroway upcoming. However, investor caution has seen the stock drop by around a tenth over the past month alone.

"The recent 10% fall in the shares exceeds the downside risk we see from the three key PIII readouts and our downside-scenario discounted cash flow (assuming all three fail) is still 23% above the current share price," Citi said.

The bank has a 18,000p target price for the stock.

Citi, meanwhile, cut its target price for GSK from 2,300p to 2,100p and kept a neutral recommendation, owing to the stock's large exposure to generic competition.

"GSK's planned portfolio event around 2Q results make sense, allowing the market to assess its broader portfolio and strategy to deal with its HIV patent cliff given multiple PIIII starts and recent M&A. However, while pipeline and BD have momentum, they are not yet enough to counter GSK's large LOE exposure," the bank said.

Berenberg downgraded its stance on Oxford Instruments on Monday to 'hold' from 'buy' as it said the risk and rewards are fairly balanced.

The bank noted that the shares have had a strong run, up 49% year to date and 63% over the past 12 months as the company has delivered its self-help strategy and benefited from semiconductor tailwinds, especially its exposure to compound semiconductor demand.

"With minimal changes to consensus forecasts, the significant re-rating has pushed the valuation to a level that, in our view, fairly reflects the risks and rewards," it said. "We believe further large orders in the Advanced Technologies (AT) division are needed to justify this valuation."

Berenberg said the share price is reflecting these orders being announced at the FY26 results on 9 June, providing scope for disappointment if the order book does not materially grow.

The bank said it was expanding its international peer group to include more listed semiconductor wafer fabrication equipment (WFE) peers. These increased multiples have led Berenberg to lift the price target on Oxford Instruments to 3,000p from 2,700p. It said the higher price target provides minimal upside.