Panmure "not expecting fireworks" from Glaxo's Q2 results

18th Jul 2014 12:22

Panmure Gordon is "not expecting fireworks" from GlaxoSmithKline's (GSK) second-quarter results due next Wednesday."In light of our recent downgrade to forecasts due to exchange rate headwinds, we are expecting another tough quarter," said Analyst Savvas Neophytou."China has not washed through completely either and generic competition to Lovaza in the US also makes this quarter difficult."In its first-quarter results, GSK had said FX rates at the time would hit sales by 8%. However, Neophytou said that with rates continuing to move against the company in the second quarter, "we expect the impact to be even worse, perhaps in double-digit territory".While the analyst kept a 'hold' rating for the stock, he said GSK will likely emerge from next year as a stronger business," with a clear focus and above average business development capability".Despite the overall cautious stance, Neophytou said that with the stock yielding 5% there is "little downside risk from present levels". A 1,650p target price was retained for the stock, which was up 0.6% at 1,558p by 12:20 on Friday.Bc