Analysts Upgrade GSK and Nvidia with Positive Outlooks

Key Takeaway

• Citi upgrades GSK to 'buy', raising the target from £17 to £21, buoyed by Blenrep's success and potential £2.5 billion revenue.
• UBS hikes Nvidia's price target to $850 from $580, citing strong AI demand despite a 1% premarket drop in shares.
• Analyst updates underscore GSK's commercial strides and Nvidia's growth potential in AI and data center markets.

Wall Street Analysts Update Views on Nvidia and GSK

In recent analyst updates, Nvidia and GSK (GlaxoSmithKline) have been highlighted for their market positions and future potential, according to reports from UBS and Citi.

GSK Sees Upgrade from Citi

Citi analyst Andrew Baum has upgraded GSK to a 'buy' from a 'neutral' status, raising the price target from £17 to £21. This adjustment reflects a 10.8% increase in U.S.-listed shares of GSK this year. Baum's optimism is rooted in GSK's recent successes in both commercial performance and its development pipeline. A key factor in this upgraded outlook is the performance of Blenrep, a therapy for adults with relapsed and refractory multiple myeloma. Recent data from the DREAMM-7 study indicated a significant reduction in the risk of disease progression or death for patients treated with Blenrep, suggesting it could become a new standard of care with potential revenue of £2.5 billion. Baum also notes potential revenue boosts from GSK's position in the RSV market and other catalysts, leading to an increase in earnings per share forecasts by up to 50%.

UBS Raises Price Target on Nvidia

Nvidia, a leading chipmaker, received a bullish update from UBS, with the bank increasing its price target on the stock to $850 from $580, indicating a potential upside of 17.6% from Monday’s close. UBS analyst Timothy Arcuri points to a reduction in lead times for Nvidia's products to approximately 3-4 months, suggesting that while normally a decrease in lead times could signal weakening demand, in Nvidia's case, it indicates a strong ongoing demand for AI compute capacity. This demand is expected to contribute to significant potential upside in shipments and revenue, particularly in the data center segment. Nvidia, which is set to report its fiscal fourth-quarter earnings next week, has seen a substantial increase in its stock value, gaining nearly 46% in 2024 following a 238.9% surge in 2023. Despite these gains, Arcuri notes that Nvidia's forward price-to-earnings ratio remains on the lower end of its historical range. However, Nvidia shares experienced a 1% decrease in premarket trading following the announcement.

Market Reactions and Future Outlooks

These updates from UBS and Citi reflect the dynamic nature of the stock market, where analyst ratings and target adjustments can influence investor perceptions and stock performance. GSK's recent successes in its therapy developments and commercial strategies have positioned it favorably in the eyes of Citi analysts, while Nvidia's continued dominance in the AI and data center markets, despite its recent stock price adjustments, underscores its potential for further growth as highlighted by UBS. Investors and market watchers will likely keep a close eye on these companies as they continue to evolve and respond to market demands and challenges.

Street Views

• Andrew Baum, Citi (Bullish on GSK):

  "GSK’s recent commercial and pipeline ‘wins’ put GSK in a stronger position to attract both external talent and pipeline assets." "The therapy could generate £2.5 billion in revenue as a ‘new standard of care.’"

• Timothy Arcuri, UBS (Bullish on Nvidia):

  "Customer discussions confirm NVDA’s lead times have come in substantially over the past few months (now ~3-4 mos), meaning shipment slots are still available in C2H:24." "Normally, this is bad, but demand for AI compute capacity is still so strong, in the near term, we think this just points to significant upside potential to shipments/revenue."