Opinions Brett Girard, CPA, CA, CFA
GlaxoSmithKline PLCGSKDON'T BUYOct 28, 2019
Stock price when the opinion was issued
As of Jun 04, 2026. Market Open.
You might be interested:
;fill-opacity:1;'/%3e%3cpath%20d='M31%2018.6001V30H8V18.6001L14.1334%2022.4334L19.4999%2014L24.8669%2022.4334L31%2018.6001Z'%20fill='%23EE5432'%20style='fill:%23EE5432;fill:color(display-p3%200.9340%200.3310%200.1956);fill-opacity:1;'/%3e%3c/svg%3e){kind=small}
Premium content
Premium contentPremium content
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.
The cost of bringing a new drug to market hasn't changed, but the customer base has shrunk. Same costs, smaller revenue base. He likes healthcare for being recession-resistant, but he prefers a medical device company like Stryker.