Opinions Gavin Graham
GlaxoSmithKline PLCGSKCOMMENTSep 27, 2019
Gavin GrahamStock price when the opinion was issued
As of Jun 04, 2026. Market Open.
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Premium contentPremium contentPremium contentPremium contentWe reiterate GSK as a TOP PICK. We like that cash reserves are holding steady, despite an aggressive retirement of debt. It trades at 22x earnings and supports a 18% ROE. The solid dividend is backed by a payout ratio under 50% of cash flow. The company is partnering with another pharma to develop Parkinson's disease treatments. We continue to recommend a stop at $27, looking to achieve $41 -- upside potential over 20%. Yield 4.6%
(Analysts’ price target is $40.89)Premium contentThis large global biopharma company has reported continued success in a oncology based treatment for a blood cancer effecting 180,000 new patients annually. The company is building cash reserves while debt is retired. It trades at 22x earnings and supports a 21% ROE. We recommend setting a stop-loss at $27, looking to achieve $45 -- upside potential of 26%. Yield 4.5%
(Analysts’ price target is $45.07)
They sold their personal care business to generate a lot of capital. They're strong in vaccines, but don't have a strong pipeline of drugs. So, they need to buy other companies to make up for that. Not a high PE and pays a good dividend. The key is what they will do with their capital.
Great dividend yield of 6.3%, trades at only 10x earnings. Cheap, you can own it here. Grew vaccine business. New CEO shed some divisions, so now more of a pure pharma company, which has risks. Have to worry about pipeline constantly. JNJ, for example, is more diversified, and that's what he prefers.
Bristol Myers's latest drugs haven't done as well as they thought. GSK has refocused into pharmaceuticals, and they sold off the consumer products division. After 5 years, they have both come to be around the same price. He would prefer GSK.