GSK PLC (LSE:GSK, NYSE:GSK) remained on the sell list at UBS despite the favourable Zantac ruling in the US today which it said “is clearly a positive development for the defendants.”
But it pointed out its sell rating is not based on the Zantac litigation – it assumes no liability in its valuation.
But it did caution “Drawing on our glyphosate experience the point we previously made is that this tends to be a drawn out process.”
It said its sell case is based on the meaningful risk to medium terms earnings.
UBS has valued GSK on a discounted cash flow basis but does see key risks to its rating being: 1) a quick resolution of the Zantac litigation; 2) meaningful Shingrix sales in China; 3) successful inorganic growth; and 4) signs of R&D productivity improvements.
For now though UBS reiterated its sell rating with a 1,300p price target.