Morgan Stanley Downgrades GlaxoSmithKline to Underweight (GSK)
January 19, 2011 1:12 PM
Morgan Stanley published its research report today on GlaxoSmithKline (NYSE: GSK) downgrading GSK from Equal-weight to Underweight.
In a report sent to investors, Morgan Stanley's reasons for downgrading include:
Our EPS estimates are 10-20% below consensus.
Revenue momentum in the US will remain lackluster given high levels of risk aversion inside the organization.
We are concerned that GSK will need to make significant further provisions to address both public and non-public cases involving false claims inside and outside the US.
We think the rate of operating improvement and cash conversion will remain slow, despite efforts from the new CFO.
We partly ascribe GSK's relative lack of success in closing bolt-on deals to an IT system inferior to other bidders'.
Morgan Stanley maintains an 11.30 British Pound price target.
GSK is trading at $37.91, down 0.71% from yesterday's close.
