LONDON (ShareCast) - (Sharecast News) - Shares in biopharma giant GSK were rising on Friday, helped by forecast upgrades from Citi, which raised its target price on the stock from 1,535p to 1,700p.
However, while the new target suggests nearly 12% upside from Thursday's closing price of 1,521.2p, it isn't enough to change Citi's 'neutral' rating on the stock.

"We have found ourselves warming to GSK after almost a decade without a positive rating," said analyst Andrew Baum.

Nevertheless, the bank has now increased its core earnings per share estimates for 2030 to 2035 by between 19% and 43%.

"GSK's embrace of a 'Back to Basics' strategy on three key therapeutic areas focus materially increases the probability of shareholder value creation. We particularly like the recent Bellus and Aiolos respiratory deals addressing de-risked targets in a core therapeutic area of competence for GSK," Baum said.

Meanwhile, GSK has already settled numerous lawsuits in the US that claimed that its discontinued heartburn drug Zantac caused cancer, and the majority of outstanding cases relate to filings within Delaware that cover c.80,000 plaintiffs. Pre-trial hearings were scheduled to start this week and so the market is waiting to hear if there are any further settlements due this year.

According to Baum, a potential dismissal of the Delaware multidistrict litigation would translate into a settlement of up to $2bn which would result in a "modest positive share price reaction".

Baum added that Citi has also raised its forecasts for ViiV - the HIV treatment joint venture set up by GSK, Pfizer and Shionogi - "assuming the next-generation therapies with longer dosing windows translate into higher adoption rates".

GSK's share price was up 1.4% at 1,541.7p by 1129 GMT.

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE