GlaxoSmithKline Upgraded At J.P. Morgan As Bearish Thesis Has Been Played Out

GlaxoSmithKline was upgraded to neutral from underweight at J.P. Morgan Cazenove on Tuesday, which cited some optimism over the the drug maker's pipeline, now that the bearish thesis has already been played out. With consensus analyst earnings estimates having dropped by 15% to 18% this year, analyst James Gordon said he no longer see downgrades as a significant concern. "Similarly, with [GlaxoSmithKline] having ruled out [dividend] growth until at least 2017, expectations are now achievable," Gordon wrote in a note to clients. He said the company's upcoming research and development day event to be supportive of the company's outlook, "potentially increasing appreciation of the early-stage pipeline and partnered assets," with a focus on oncology epigenetics--turning off cancer genes--and very early stage immuno-ocology projects. The U.S.-listed shares, which were little changed in premarket trade, have lost 5.5% year to date while the S&P 500 has slipped 2%.