Berenberg Upgrades GSK to Buy With £22 Target

Berenberg Bank upgraded the British pharmaceutical company GSK from hold to buy on Tuesday, raising the price target for the stock to £22 from £20. The brokerage firm cited a stronger late-stage drug pipeline and increased business-development activity as the primary drivers for the upgrade, noting that GSK currently trades at a 23% discount compared to its European peers.

Analysis from Berenberg indicates that 10 of GSK's 11 novel Phase 3 assets were sourced externally, with six of those expected to generate at least £2 billion in peak annual sales each. This pipeline is intended to offset patent erosion for dolutegravir, with the broker forecasting sales of approximately £39 billion by 2031.

To support research spending and maintain margins, GSK is implementing a cost-saving program targeting £1.9 billion in annual savings by 2029. Following the announcement, GSK shares rose 0.4% to £18.62 in early London trading.