Glaxosmithkline at "inflection point" as UBS upgrades from 'sell' to 'buy'

Glaxosmithkline's shares were given a boost on Friday by UBS which upgraded its rating for the pharmaceutical stock by two notches from 'sell' to 'buy', saying that the business is now at an "inflection point".The bank hiked its target price for the stock from 1,250p to 1,700p, saying it foresees strong growth driven by Glaxo's new products."GSK has been a difficult investment case for years, with declining earnings since 2010, as sales growth has been anaemic and the operating margin trended steadily down despite several rounds of restructuring," UBS said.However, after a dramatic deterioration in the outlook in 2014 owing to US pricing concerns, earnings downgrades have now come to an end, the bank reckons."For the first time in over a decade, we see scope for substantial earnings growth in the coming three-five years, driven by new products in ViiV and Vaccines," the bank said.In particular, the potential transformational impact from its Triumeq and Tivicay HIV treatments presents a "blockbuster opportunity" for the group and is currently under-appreciated by the market.Assuming a 25% patient market share in the US by 2018, UBS now estimates that sales from Triumeq and Tivicay could together reach $4.6bn, up from its previous forecast of $2.8bn and 75% ahead of the current consensus forecast of $2.6bn.UBS also sees strong potential in the shingles vaccine HZ/su, estimating sales of $1.4bn by 2020 which is still not reflected in consensus forecasts and Glaxo's share price.Glaxo was trading 3.6% higher 1,539p by 10:31.