UPDATE: Morgan Stanley Downgrades GlaxoSmithKline to Underweight on Growth, Pricing Policy Headwinds

Morgan Stanley downgraded GlaxoSmithKline

from Equal-weight to Underweight. Morgan Stanley said, "Modest growth outlook (12% EPS CAGR 2012-14e), unlikely margin expansion, uncertainty around pricing policy and full valuations (23.6x 2013e) drive our downgrade to UW. MS India strategist expects 20% upside for the markets from current levels, and hence we expect GLAX to Underperform. … EPSe cut 6%/ 7.8%for 2013/ 2014 driven by slower sales growth and lower margin. We have not incorporated the impact of NPPP, which could hurt near-term earnings (10-16%, not assuming other factors -volume gains, price increase in non-NLEM portfolio)." GlaxoSmithKline closed at $44.27 on Wednesday.