JP Morgan Cazenove Reiterates GSK plc - Depositary Receipt (GSK) Underweight Recommendation

JP Morgan Cazenove reiterated an "Underweight" rating on GSK plc (NYSE:GSK), setting an average price target of $44.99, which implies a 3.51% downside from its recent closing price of $46.63, alongside a projected 1.25% decrease in annual revenue to 31,763MM. Despite this negative analyst outlook and revenue forecast, institutional ownership in GSK increased by 3.04% over the last quarter, with a bullish put/call ratio of 0.51, though some major holders like Dodge & Cox and Fisher Asset Management reduced their portfolio allocation to the stock.

Analysis

JP Morgan Cazenove reiterated an "Underweight" recommendation for GSK plc on November 7, 2025, setting an average one-year price target of $44.99. This target implies a 3.51% downside from the latest reported closing price of $46.63, reflecting a cautious outlook. The analyst's view is underpinned by a projected annual revenue decrease of 1.25% to $31,763 million and a non-GAAP EPS forecast of $1.64.

Despite this bearish analyst rating and projected revenue decline, institutional interest in GSK appears to be growing. Total shares owned by institutions increased by 3.04% over the last three months, with 1,052 funds reporting positions, an increase of 0.86% quarter-over-quarter. The average portfolio weight dedicated to GSK also saw a 2.85% increase to 0.40%, and the put/call ratio of 0.51 suggests a bullish options sentiment.

However, a closer examination of major shareholders reveals a mixed strategy. While Dodge & Cox and Fisher Asset Management increased their absolute shareholdings by 0.13% and 4.17% respectively, they simultaneously reduced their portfolio allocation to GSK by 2.15% and 5.14%. In contrast, Primecap Management and Vanguard PRIMECAP Fund increased both their share count and portfolio allocation, indicating stronger conviction.

This divergence among large institutional investors, coupled with the contrast between a negative analyst outlook and overall increasing institutional ownership, presents a complex investment thesis. It suggests that while some see near-term headwinds, others may be accumulating shares, potentially anticipating a long-term recovery or value proposition not fully captured by current analyst projections.

Key Decisions for Investors

• Investors should closely monitor GSK's upcoming financial results for any divergence from the projected 1.25% revenue decline and $1.64 non-GAAP EPS, which are central to the 'Underweight' rating.
• Evaluate the implications of major institutional investors like Dodge & Cox and Fisher Asset Management reducing their portfolio allocation to GSK despite increasing share counts, as this could indicate a strategic rebalancing or reduced conviction.
• Consider the bullish put/call ratio of 0.51 as a potential contrarian signal to the analyst's downside forecast, suggesting options market participants may anticipate price stability or upside.