Gsk Share Discussion Threads

[4spiel] 23/7/2015 12:42

anhar your analysis re Goldman target of1800 p is substantially correct and grateful for you writing this. My reason for posting it was only for information when I saw it -nothing else. However they could be right and I hope so as I keep some GSK and I use some of their good products. Indeed with the generous dividend they pay shareholders for some period ahead there is scope for this share to rocket to this figure and then drop back again well before we get evidence of post Novartis growth perspectives - that would be looking at it in a purely speculative way - and it could or might not happen. that is only one possibility that Goldmans may have been postulating and there are others too.

[cyberian] 23/7/2015 11:23

As someone on the iii bb posted recently that Gilead and GSK basically had a duopoly on HIV related treatment, the former is capitalised at $172 bln, and GSK is valued at $100 bln. Gilead is almost 100% hiv related whereas GSK it is only a part, albeit a very significant and important driver, so much so that it will not be spun-off in a IPO.

[darias] 23/7/2015 10:43

Analysts do perform a function as they pass their soothsaying on to their clients and, as such, they can be self fulfilling.

I am in an investment club and one of our members regularly reads out Redmayne Bentley's recommendation as if it is gospel. He does not do any other elementary research on RB prognostications. Now he gets the bulletin in the post and if others behave as he does then they can move a share to the price that they predict.

[cyberian] 23/7/2015 09:59

Hopefully the message with the results due over the next few days will be encouraging on the forward direction, as the share price appears to have accepted the near term cost of implementing changes to the business plan/strategy.There is like Eli Lilly the possibility of a breakthrough in one of their many compound applications to benefit a global market. Sure, sometimes expectation rise ahead of eventual breakthrough, but that would be a bonus, like we have seen with the share price of Eli Lilly.

[anhar] 22/7/2015 11:48

I think that Goldman do make money for themselves. They are amongst the smartest operators around.

But that doesn't change my view on analysts' publicised price projections, whether from them or other firms. Those figures are worthless but as I said, Goldman and the rest are well aware of this and have their own reasons for issuing them.

It seems only a lot of naive small investors who frequent ADVFN and other sites who constantly repeat this nonsense here. Often its the psych. weakness of confirmation bias, quoting only those price targets which agree with their position and carefully ignoring those that don't, as if that improves their chances of scoring.

[nick100] 21/7/2015 18:42

If these analyst knew anything,they would be making money for themselves.

[zcaprd7] 21/7/2015 16:48

Had a nibble

[dr biotech] 21/7/2015 14:34

I think an analysts opinion is as valid as anyones - but most of them are reactive. I seem to recall seeing an article that said not one oil analyst saw the oil fall coming. Most analysts seem to pick a price then adjust it as the price moves. One of the companies I follow more closely is esure. Last year at 260 most analyst were saying 260-300. Share sank to 210 - analysts changed to 190-210. Now the price has rebounded and as if by magic the target SPs have changed. I dont think any of them got it right, they just changed their forecasts to make them look less stupid.

[anhar] 21/7/2015 14:13

People repeat analysts' forecasts all over ADVFN and other sites as if they virtual certainties but they are worthless. I don't pay any attention to them whatsoever but it seems many do.

Few seem to appreciate that these targets are issued as a form of advertising and there may also be biased considerations going on too. If one does it, they all have to. Repeating them here just gives the advert wider exposure.

They can get away with any old forecast because few if any check later how accurate the forecasts were, even though it is certain that most will be wildly wrong as studies have revealed. But because these are generally not followed up by investors, the brokers can issue them with little fear of recourse.

Actually they do have reasoning for their figures. They aren't just plucked out of the air by the office cleaner. But because we are dealing with the unknown future their targets lack credibility and different brokers will have different outcomes.

There have though been attempts to show how poor these forecasts can be. Here's just one academic critique of such forecasting:

www.princeton.edu/~hhong/seers.pdf

They know it's nonsense, all market pros know it's nonsense and it seems that only a large proportion of deluded small investors don't know it. You are near certain to lose money if you allow this stuff to influence you sufficiently.

My advice is to make up your own mind about the merits of a share and ignore what others think. Establish a strategy which works for you and stick to it regardless.

[zzaxx99] 21/7/2015 13:36

"Goldman target now 1800p"

Or to put it another way "Goldman issue utterly meaningless guess, devoid of any timeline which would substantiate their reasoning"

[masurenguy] 21/7/2015 13:17

Do you have any source you can reference to substantiate that projection?

[4spiel] 21/7/2015 12:59

Goldman target now 1800p

[jadeticl3] 21/7/2015 12:36

Sorry Amhara. Your post had not been written when I wrote mine.

[jadeticl3] 21/7/2015 12:34

Yes a good future for dividends. The Q4 dividend together with the 20p special will be paid together, which is normally in April (second week), so that payment should be about twice the normal. Very nice! My hope/expectation is that the current level of 80p per year will be held for 3 years, then improve after that providing the new products perform as expected.

[anhar] 21/7/2015 12:30

Yes, their existing plan is to pay 80p for 2015 and the same for the next two years plus a 20p special with Q4 for 2015. So as cyberian says, there will be 100p in total for the 2015 accounting year.

You could regard the 20p special as compensation for the lack of increase in the normal divi over the three years.

So given that the total three year divi is expected to be 260p by 100, 80, 80p, you could see it in effect as a rising divi of say 83, 87, 90p for 2015-2017. This way of looking at it compares well with the 80p paid in 2014 for someone who holds throughout, which I probably will unless they hit my exit target meanwhile.

Not much danger of that for the time being. They would have to be well over 2,000p to approach my exit on the current FTSE100 yield.

Divis can never be guaranteed and I know some doubt that GSK will meet the commitment, but that is their current intention.

[tradermichael] 21/7/2015 11:35

OK, many thanks for the updates - a good future for dividends then, and stronger support for the share price

[deanowls] 21/7/2015 11:22

Lol Cyberian, I was feeling all hurt until the last line!

[dr biotech] 21/7/2015 10:51

results next week. We have had a few disappointments recently so hopefully this will be more upbeat. Doubt we will see many near term drivers though, for me this is just a longer term income play.

[cyberian] 21/7/2015 09:42

Wrong...the special Dividend will be paid following the 4th quarter results making just over 100p for the full year. It came after the £4 billion intended to be paid was reduced to £1 billion to protect the 3 year dividend commitment, but also critically to give support the balance sheet and safeguard potential adequate funds for other opportunities/developments. SORRY, posted just after the last one as I typed my response over Special Dividend issue.

[deanowls] 21/7/2015 09:41

Think there is a 20p specail at the year end still, check the last update.

[tradermichael] 21/7/2015 09:30

Ok, thanks

[sicker] 21/7/2015 08:47

TM, It was my undersatnding that the special dividend offer had been withdrawn in favour of an 80p dividend cover for the next 3 years.

[tradermichael] 21/7/2015 08:32

Does anyone have any update on the Special Dividend - timing/value, please?

[tradermichael] 20/7/2015 08:50

Boat hasn't set sail yet:

■7/17/2015 – GlaxoSmithKline plc had its “buy” rating reaffirmed by analysts at Goldman Sachs. They now have a GBX 1,800 ($28.09) price target on the stock.
■7/14/2015 – GlaxoSmithKline plc had its price target lowered by analysts at Barclays from GBX 1,820 ($28.40) to GBX 1,650 ($25.75). They now have an “overweight221; rating on the stock.

[homeboy35] 18/7/2015 07:03

Maybe missed the boat - better off trading the supermarkets atm