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Q3 stocks – page 3
GlaxoSmithKline (GSK)
GSK is in the process of consolidating itself as a market leader in vaccines while simultaneously divesting much of its pharmaceutical business. In July, the company’s Mosquirix malaria vaccine (note the first ever malaria vaccine. In the world, ever) won approval by the European Medicines Agency. A move towards vaccines and newer products is offsetting the waning sales of hitherto ‘blockbuster’ product Advair, a respiratory drug. CEO Andrew Witty is slating a return to profit growth in 2016 with Q2 results supportive of such rhetoric. Shares at lows – could now be the time to jump on the wagon?
Will shares break out towards 2015 highs 1650p? or will they pull back towards the channel floor 1330p?
Technical observations
- RSI and Momentum have support at 3-month rising lows
- Note recent share price bounce on waning volume
Bloomberg Broker Consensus: 23% Buy, 51% Hold, 26% Sell;
Consensus target: 1470p (+5%)
ITV (ITV)
CEO Adam crozier praised the BBC’s Strictly Come Dancing, a show that is seen by many as the type of trashy mass entertainment best left to commercial rivals. The UK government published a green paper suggesting the Beeb may be better off delivering ‘distinctive, quality’ programming rather than competing (which it does not need to do – our taxes fund it) with the likes of ITV.
The point is, ITV’s viewing figures are dwindling and if the BBC were to axe the rating chasing shows like Strictly, then presumably its viewers would move over to those that are pushing them hard. ITV shares are currently trading around all-time highs and, even if the latest results were good, the future’s not necessarily bright for ITV. Remember what we said about the outlook? It could go either way such that both long and short opportunities may present themselves here.
Will shares break out and make new all-time highs north of 280p? or will they fall back towards 13-month lows 170p?
Technical observations
- Converging highs and lows testing 12-month uptrend
- Support around the 100-day moving average
Bloomberg Broker Consensus, ITV: 55% Buy, 35% Hold, 10% Sell;
Consensus target: 284p (+2%)
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Prepared by Michael van Dulken, Head of Research
