GlaxoSmithKline-Upside From OTC Split - U/G to BUY
A number of investors have explained to us they are willing to wait for the GSK separation given the potential for R&D self-help & the 5.5% dividend yield. In light of this, we conducted a deep-dive on each of the 4 divisions to ascertain the true value to GSK shareholders from the separation. We show that by 2022, GSK could be worth £18.50 and there is potential to get close to £20 if the pipeline delivers. Moreover, we show Consumer Health is in for free at today’s valuation. We show Vaccines accounts for 80% of GSK Biopharma value, ViiV isn’t actually worth much, the Pharma rump has the most upside potential & OTC is worth £4.50/share to GSK s’holders. We upgrade to BUY with a £17 PT & see minimal downside risk.For access to full note contact Naresh Chouhan
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GlaxoSmithKline is a global healthcare company. Co.'s segments include: Pharmaceuticals; Vaccines; and Consumer Healthcare. The Pharmaceuticals segment is focused on developing new medicines in respiratory, HIV, oncology and immuno-inflammation, with discovery research exploring these and other areas. The Vaccines segment has a portfolio and pipeline of vaccines to help protect people throughout life. Co. delivers vaccines to people living in over 160 countries. The Consumer Healthcare segment develops and markets consumer-preferred brands in oral health, pain relief, respiratory, nutrition/gastro-intestinal and skin health.
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