The FTSE 100-listed GlaxoSmithKline PLC (GB:GSK) yesterday lifted its annual profit and sales outlook as it reported solid Q3 numbers backed by its vaccine sales. This was the second upgrade from the company this year, following the successful launch of its respiratory syncytial virus (RSV) vaccine.
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Based in the UK, GlaxoSmithKline is a global pharmaceutical company with a presence in roughly 80 countries. The company’s extensive portfolio is divided into three segments: Vaccines, Specialty Medicines, and General Medicines.
According to its Q3 2023 earnings report, total vaccine sales grew by 33% to £3.2 billion, with total sales reaching £8.1 billion. For the full year, GSK has revised its expectations, anticipating a higher annual revenue growth of 12% to 13% compared to its earlier projection of 8% to 10%. Additionally, adjusted earnings per share (EPS) is expected to be in the range of 17% – 20%, surpassing the previous estimate of 14% – 17%.
The company has declared a dividend of 14p per share for the third quarter and has set a target to distribute 56.5p per share for the entire fiscal year.
All Bets on Arexvy
Arexvy, which was introduced in the U.S. and other global regions in August, has experienced significant demand, which has in turn driven strong third-quarter sales, amounting to £700 million. For the full year, GSK has projected sales in the range of £900 million to £1 billion for Arexvy. Currently, the vaccine is approved for use in the U.S., Europe, Japan, and various other countries, targeting adults over 60 years old.
GSK is placing a significant bet on its vaccine, Arexvy, to become its next highly successful medicine. This comes as a big relief for the company, especially when it anticipates a decline in revenue from its existing best-selling products due to the expiration of patents, projected to happen by the end of this decade.
Moreover, Arexvy is the exclusive vaccine offered by CVS Health (NYSE:CVS), the largest pharmacy chain in the U.S. This gives GSK a competitive advantage over its rivals in the pharmaceutical market.
Is GSK a Good Stock to Buy?
Despite solid numbers, the share traded down by 2% on Wednesday after gaining some momentum in early trading. The company’s stock has experienced a notable decrease of 30% since June 2022, mainly due to ongoing litigation concerns related to the medication Zantac.
According to the consensus on TipRanks, GSK stock has received a Hold rating. This rating is backed by two Buy recommendations, three Hold recommendations, and three Sell recommendations. The GSK share price forecast is set at 1,505p, indicating a projected increase of 5.6% from the current level.
