GlaxoSmithKline - Top of the range, limited upside.

GlaxoSmithKline PLC is a global healthcare company. The Company operates through two segments: Pharmaceuticals and Vaccines. The Company focuses on its research across six areas: Respiratory diseases, human immunodeficiency virus (HIV)/infectious diseases, Vaccines, Immuno-inflammation, Oncology and Rare diseases.

GlaxoSmithKline has shifted strategy in recent months by increasing spend on science research and development by 12%, this has been seen by some as too little to late. AstraZeneca implemented a similar plan 5 years ago. Revenues were flat at GSK in the most recent market update. The timing of the additional investment is also under scrutiny as net debt increased from £23.9bn to £28.7bn. The share price feels a bit heavy here and it could be time to cash in.

Best Broker Target Price: 1750p (Jefferies 23/04/2019)
Worst Broker Target Price: 1575p (Deutsche Bank 08/07/2019)

Technical Analysis
The share price of GlaxoSmithKline has been trading in a huge range since mid-2015. The price has gyrated between 1227-1745 for many months and there appears to have been another failure at the upper end of the range. The week commencing 29th July 2019 ended with a inverted hammer candle, this is a bearish signal and suggests further downside could be seen in the short term. It is possible that we could see a continuation of the range.

Recommendation: Sell between 1600-1750p
Stop: 1780p
Target: 1230p


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