JPMorgan ups Glaxo to 'neutral', says consensus now looks achievable

The bank noted that medium-term consensus earnings per share estimates have fallen 15-18% year-to-date and expectations now look achievable, with downgrades no longer a concern.

In addition, it said a pipeline review suggests the company’s upcoming research and development day has a positive risk/reward.

JPM said expectations are low heading into the R&D day, due to historical pipeline setbacks, and limited disclosure.

“We don’t anticipate big upgrades, but we expect the event to be supportive, potentially increasing appreciation of the early-stage pipeline and partnered assets,” it said. It expects a focus on oncology epigenetics, which involves turning off cancer genes, and very early stage immuno-oncology projects.

Finally, JPM said the 6% dividend yield provides near-term support.

At 1230 BST, Glaxo shares were up 1.2% at 1,321.34p.