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Investing.com -- Berenberg has lowered its rating on GSK plc (LON:GSK) to Hold from Buy, a move driven by the stock’s strong year-to-date (YTD) performance and an expected pause in investor enthusiasm ahead of key product rollouts.
The drugmaker’s U.S.-listed shares fell more than 2% ahead of the market open on Tuesday.
Despite leading the pharma sector with a 12% share price gain this year, GSK still trades roughly 30% below the net present value (NPV) of its marketed drugs alone.
The broker remains confident in GSK’s pipeline progress but expects a “show-me attitude” from investors until launches begin to deliver.
Recent developments include a broader-than-expected approval for Nucala in COPD and a positive CHMP opinion for Blenrep, alongside a new acquisition of the Phase 3-ready efimosfermin for liver disease.
“We move to a Hold rating (from Buy) and reiterate our price target of GBP16.00,” the analysts led by Kerry Holford wrote. While GSK’s valuation remains undemanding, the analysts “prefer Sanofi (NASDAQ:SNY) for pharma value investors.”
The market will be watching several catalysts in the second half of 2025, including U.S. approval for Blenrep and Phase 3 data for camlipixant in chronic cough.
GSK also expects a regulatory decision on depemokimab in December and further pipeline entries such as efimosfermin.
Despite the re-rating, GSK shares continue to trade at a discount. Specifically, it trades at 8.7x 2026 adjusted earnings, below the 11.5x average for European peers excluding obesity-focused firms. On an EV/NPV basis, the shares trade at 0.70x, versus 0.82x for that peer group.
Berenberg’s long-term investment case hinges on whether the pipeline can offset looming HIV franchise patent expiries beginning in 2028. The analysts flagged that Blenrep’s re-launch, broader uptake of Nucala, and the implications of potential U.S. pricing reforms will be key areas of focus.
“Pipeline still comes for free,” the note said, highlighting the upside potential if upcoming milestones are met. However, near-term visibility and execution will likely dictate investor sentiment.