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Deutsche Bank stays at 'hold' on GSK, says shares 'fully valued'
6th Feb 2020 14:15
(Sharecast News) - Analysts at Deutsche Bank stood by their 'hold' recommendation and 1,650.0p target price for shares of GlaxoSmithKline following the drug giant's fourth quarter numbers.
In particular, they noted that the miss in earnings per share meant that company guidance for a 1.0-4.0% drop in EPS for 2020 would now come from a lower base, meaning that the analyst consensus needed to rebase its forecasts.
Together with a projected headwind from foreign exchange rates, they judged the consensus to be roughly 4.0% too high.
Furthermore, the miss on EPS came despite a "significant" tax benefit.
As for the new ?700.0m cost savings programme put in place, they expected a significant proportion of it to be reinvested.
"We continue to believe the shares fully value GSK's restrained near-term growth prospects."
In particular, they noted that the miss in earnings per share meant that company guidance for a 1.0-4.0% drop in EPS for 2020 would now come from a lower base, meaning that the analyst consensus needed to rebase its forecasts.
Together with a projected headwind from foreign exchange rates, they judged the consensus to be roughly 4.0% too high.
Furthermore, the miss on EPS came despite a "significant" tax benefit.
As for the new ?700.0m cost savings programme put in place, they expected a significant proportion of it to be reinvested.
"We continue to believe the shares fully value GSK's restrained near-term growth prospects."