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GlaxoSmithkline - Broker downgrade wipes £1.4bn from the value of Europe's largest drug maker

05:30 EDT 5 Jul 2017 | Proactive Investors

A leading investment bank said the challenges to GlaxoSmithKline’s (LON:GSK) HIV drug franchise is growing, while rewards from the pill pusher’s R&D pipeline are ‘distant’ as it downgraded its stock recommendation. Citi has gone to ‘neutral’ from ‘buy’ on GSK shares, which it reckons are worth £17 each. It prefers AstraZeneca (LON:AZN), Roche Holdings Ltd (VTX:ROG) and Bayer AG (ETR:BAYN). The American outfit reckons new boss Emma Walmsley has a job on her hands turning around Europe’s largest drug maker. Roadblocks to growth  “While the new CEO has correctly identified roadblocks to address GSK’s legacy of lacklustre innovation, the timelines are protracted,” Citi said. “We anticipate the CEO to outline new strategy at 2Q, concentrating pipeline, potentially carving out oncology using ViiV [the joint venture between GSK and Pfizer] as the template.” At 9.30am the shares were off 1.7% at £16.10, wiping almost £1.4bn from the value of the business. Of the 17 analysts logged as following GSK, eight concur with Citi in believing the stock is fully valued, there are six that have ‘buy’ recommendations while the remainder are ‘sellers’ of GSK. The consensus price target us £17.40.    

Original Article: GlaxoSmithkline - Broker downgrade wipes £1.4bn from the value of Europe's largest drug maker

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