Wall Street sentiment is cautiously positive this morning with all the benchmarks trading slightly in the green.
Some experts say we’re in “the golden age of biotechnology.” Scientific advances are opening up possibilities for the treatment and prevention of diseases that could only have been imagined in the past.
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This golden age is also presenting tremendous opportunities for investors. Biotech stocks offer the potential for huge long-term returns. Today’s trade alert highlights a biotech stock that boasts a strong pipeline and already has a few winning drugs on the market and there appears to be plenty of room for upside expansion in 2021.
GlaxoSmithKline (GSK), well-known for its vaccines as well as respiratory drug Advair, is a transformation story that’s been underway since CEO Emma Walmsley took over in April 2017.
Walmsley’s plan includes spinning out consumer products like Sensodyne toothpaste, Advil pain reliever and Centrum vitamins in a joint deal with Pfizer, although that has been delayed. GSK is also divesting other assets, such as a joint spin-off with Pfizer, although that has been delayed. The company also continues to divest other assets, such as plants in Poland and Canada.
The company’s top immunology drug, Nucala, is used in some cases of asthma and was recently approved for treating a rare blood disorder called hypereosinophilic syndrome, or HES. The drug works by preventing a protein from binding to white blood cells.
Argus Research’s Eade “Buy” calls GSK‘s price a buying opportunity and has a 12-month price target of $50 on the stock. He also calls out an attractive 5.23% dividend yield and says GSK shares trade below industry averages.
UBS’s Sutcliffe also sees GSK as a Buy. “The HIV business experienced a recent flattening of US sales, but new products mean the franchise has now returned to modest growth,” she writes. “Launch of a new injectable should further boost growth and we see mid-single-digit HIV sales CAGR through 2023.”
With a trailing twelve month price to earnings ratio of 11.96, GSK seems to have plenty of runway ahead in the mid term. Of 7 analysts offering recommendations for the stock, 3 rate it a Buy and 4 rate GSK a Hold. There are no Sell ratings for the stock.
Where to invest $1,000 right now...
Before you consider buying GlaxoSmithKline, you'll want to see this.
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And it's not GlaxoSmithKline.
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