GSK: Liberum raises target price
(CercleFinance.com) - Liberum reinstates its "buy" rating on GSK shares, while raising its target price for them to 1870 pence from 1700 pence, after the healthcare group reported three offers from Unilever to buy its consumer healthcare unit.
The broker points out that the most recent offer valued the unit at 50 billion pounds, or around 20x its 2022 EBITDA estimate for the business, i.e. a 33% premium to its latest SOTP (sum of the parts) valuation.
"It's now hard to envisage the unit trading at a significant discount to 20x, and it is now likely to be sold at this multiple or higher. Importantly, a trade sale would put New GSK on a strong footing with an excellent balance sheet," the analyst said.
The share is currently up over 30.5% at just over 1700 pence.
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