FTSE 100-listed GlaxoSmithKline (GB:GSK) boosted the outlook for 2026 through 2031, backed by a solid drug pipeline. The news comes on the heels of better-than-expected fourth-quarter results and stellar performance for Fiscal 2023. GSK shares were up 3.5% as of the last check.
GSK is a global pharmaceutical company operating three segments, namely Vaccines, Specialty Medicines, and General Medicine. In July 2022, GSK spun off its healthcare division Haleon and has since focussed on developing its core pharma business.
Details of GSK’s Results and 2024 Outlook
In Q4 FY23, GSK’s sales increased 9% year-over-year to £8.05 billion, and adjusted earnings per share (EPS) grew 12% to 28.9p. Both these metrics came in above the consensus expectations.
For Fiscal 2023, GSK’s sales jumped 3% to £30.33 billion. During the year, sales from Vaccines business grew 25%, Specialty Medicines sales fell 8%, and General Medicines sales rose 5%. Also, adjusted EPS (earnings per share) increased 11% to 155.1p.
GSK CEO Emma Walmsley noted that the company plans to launch at least 12 new drugs from 2025 for infectious diseases, HIV, respiratory, and oncology. Based on its robust pipeline and expected launches, GSK expects to earn higher sales and profits in 2024 and beyond. Also, GSK recently announced the $1.4 billion acquisition of Aiolos Bio Inc. to enhance its respiratory portfolio.
Accordingly, GSK expects its 2024 sales growth to be between 5% and 7% and adjusted EPS growth in the range of 6% to 9%. Moreover, GSK increased its dividend payment to 60p per share for 2024 from 58p in 2023.
GSK Lifts Long-Term Outlook
GSK lifted the compound annual growth rate (CAGR) estimate for sales to more than 7% between 2021 and 2026 from the previous outlook of 5% growth. It now expects an adjusted operating profit CAGR of more than 11% during this period, compared to the prior forecast of 10%. Further, in 2031, sales are projected to be more than £38 billion, higher than the prior guide of £33 billion.
Importantly, GSK’s respiratory syncytial virus (RSV) vaccine, Arexvy, is being seen as one of the major contributors to the revenue boost. In 2023, sales from Arexvy stood at £1.24 billion in just the first year of its launch.
What is the Future Price of GSK?
Overall, GSK stock has a Hold consensus rating based on four Buys, four Holds, and two Sell recommendations. The GlaxoSmithKline PLC share price forecast of 1,693.11p implies 11.1% upside potential from current levels. Analysts’ ratings and price targets could be revised based on the improved long-term outlook issued today.
