U.S. bank JPMorgan has maintained its “Underweight” rating for British pharmaceutical company GSK (LON:GSK). At the same time, the analysts set a price target of 1400 pence for the stock. In a recent report, they refer to the likely upcoming approval of the cancer drug momelotinib in the U.S. However, the experts believe that even in the best-case scenario, only a minor boost to the company is to be expected. In addition, they warn of possible disappointments.
Shares in GSK closed yesterday at 1363.40 pence. According to JPMorgan analysts, given the current situation, there is only a small potential for returns. They believe that while the precise scope of momelotinib offers certain opportunities, it also comes with risks.
JPMorgan’s assessment is based on an analysis of momelotinib’s potential and its impact on GSK’s share price. The analysts point out that even if the cancer drug is successfully approved, the expected boost to the company could be limited. This is also reflected in their conservative 1400 pence (£1 = $1.2666) price target.
GlaxoSmithKline is a major player in the pharmaceutical industry and has a broad portfolio of drugs. The potential approval of momelotinib could strengthen the company in an important therapeutic area and improve its competitive position. It remains to be seen how the situation will develop and whether momelotinib’s potential can ultimately meet analysts’ expectations.
Overall, however, JPMorgan’s rating indicates that there is currently some uncertainty surrounding GSK’s shares. Investors should therefore be cautious and seek further information before deciding to invest.
