UPDATE: JP Morgan Downgrades GlaxoSmithKline to Underweight; Investments Risk Earnings

JP Morgan reduced its rating on GlaxoSmithKline

from Neutral to Underweight as the company's upcoming investment phase puts 2013 earnings at risk. JP Morgan commented, "With material risk to 2013 earnings, no imminent positive catalysts, and almost no upside to our new PT, we downgrade to Underweight. GSK is entering an investment phase. After reassessing the investment required to execute on the pipeline, already taken for granted by consensus, we now expect Operating margins to contract, rather than expand in 2013, and we now forecast a 2013 Operating margin 200bps below consensus. We see earnings risk in 2013, with material Operating profit and earnings growth unlikely for at least a year further out than is currently forecast by consensus (which expects topline growth and margin expansion in 2013)." GlaxoSmithKline closed at $46.07 on Tuesday.