When big companies lose their way, it can take them a long time to get on track. The following three stocks have rattled off in the wrong direction in recent years, can they find their way back?

Brightening outlook

Pharmaceutical giant GlaxoSmithKline (LSE: GSK) is seen as one of the safest bets on the FTSE 100 but it has hasn’t been a winning one in recent years. The stock is up just 7.5% over the past five years, although in fairness, that is double the growth on the FTSE 100. The reasons Glaxo went AWOL have been well documented, including the embarrassing China bribery scandal, and far more damaging concerns about prospects for its drug pipeline.

The outlook is finally brightening on the latter front with first quarter results showing new product sales soaring to £821m, more than double the same period last year. New pharmaceutical product sales now represent 20% of total pharma sales, driven by HIV, respiratory and meningitis vaccines. Sales from this source offset about 70% of the decline in former cash cow Seretide/Advair.

The results suggest to me that Glaxo is turning the corner, with first quarter sales up 11% to £6.2bn and core earnings per share up 14% to 19.8p. Management’s plan to diversify from blockbuster treatments into consumer health vaccines should also keep things moving along. The yield still looks lovely at 5.52%, the only downside being that Glaxo is no longer cheap, trading at 19.15 times earnings.

Lacklustre performance

It is a long time since global drinks giant Diageo (LSE: DGE) showed some spirit. Its has struggled since new boss Ivan Menezes took over the reigns from acquisition-thirsty predecessor Paul Walsh three years ago. Lacklustre performance has forced Menezes to water down his own earnings, slashing his pay from £7.3m to £3.9m last year. His “Drink Better” campaign equated to “Drink Less” in practice.

Menezes cannot be blamed for the emerging market slowdown, or the Chinese crackdown on gift giving, but it is hard for him to shrug off the sales slowdown in North America. Diageo’s share price has been in slow decline for three years yet Diageo nevertheless trades at a surprisingly pricey 21.27 times earnings. However, a solid 3.07% yield and forecast EPS growth of 9% in the year to June 2017 (after three years of declines) may also tempt optimists.

No mean feat

WM Morrison (LSE: MRW) endured such a dramatic fall from grace that it was hard to see a way back for the struggling grocery chain. Yet sentiment turned and today’s price of 190p is comfortably above its 52-week low of 139p.

The German discounters will continue to nibble at its heels but chief executive David Potts recently delivered like-for-like sales growth of 0.7% in the 13 weeks to May, no mean feat in this environment, and Morrisons continues to generate plenty of cash. Plans to simultaneously improve the customer experience and drive down net debt target appear to be paying off.

This is a tough sector, but Morrisons looks like it might just tough things out. It may trade at a pricey 24.5 times earnings but forecast EPS growth of 31% suggest this could just be justified.

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Harvey Jones has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. The Motley Fool UK has recommended Diageo. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.