GlaxoSmithKline (GSK) AI Stock Analysis

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GlaxoSmithKline

(NYSE:GSK)

63Neutral

GSK's overall performance is stable, driven by robust earnings growth and a strong R&D pipeline. Key strengths include specialty medicine growth and attractive dividend yield. However, challenges such as declining vaccine sales and macroeconomic pressures weigh on the score. Technical indicators suggest cautious optimism, with potential for price stability and income attractiveness.

Positive Factors

Acquisition

The acquisition of efimosfermin is sound given that it expands GSK's hepatology portfolio, provides optionality to related diseases, and fits within GSK's BD strategy.

Competitive Advantage

GSK noted the manufacturing for Trelegy is even more complicated than those devices, which suggests a competitive advantage.

Negative Factors

Manufacturing Complexity

The complexity of manufacturing for Trelegy suggests potential challenges in production.

GlaxoSmithKline (GSK) vs. S&P 500 (SPY)

Market Cap

$75.63B

Dividend Yield4.03%

Average Volume (3M)5.75M

Price to Earnings (P/E)19.5

Beta (1Y)0.27

Revenue Growth4.17%

EPS Growth-29.96%

CountryUS

Employees68,629

SectorHealthcare

Sector Strength43

IndustryDrug Manufacturers - General

Share Statistics

EPS (TTM)1.20

Shares Outstanding2,051,507,000

10 Day Avg. Volume6,047,461

30 Day Avg. Volume5,745,986

Financial Highlights & Ratios

PEG Ratio0.81

Price to Book (P/B)3.97

Price to Sales (P/S)0.00

P/FCF Ratio15.36

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$40.13

Price Target Upside4.51% Upside

Rating ConsensusHold

Number of Analyst Covering2

GlaxoSmithKline Business Overview & Revenue Model

Company DescriptionGSK plc, together with its subsidiaries, engages in the research, development, and manufacture of vaccines, and specialty and general medicines to prevent and treat disease in the United Kingdom, the United States, and internationally. It operates through two segments, Commercial Operations and Total R&D. The company offers shingles, meningitis, respiratory syncytial virus, flu, polio, influenza, and pandemic vaccines. It also provides medicines for HIV, oncology, respiratory/immunology, and other specialty medicine products, as well as inhaled medicines for asthma and chronic obstructive pulmonary disease, and antibiotics for infections. It has a collaboration agreement with CureVac to develop mRNA-based influenza vaccines, and with Wave Life Sciences and Elsie Biotechnologies, Inc for oligonucleotide platform development; two strategic collaborations with Relation to advance therapeutics for fibrotic diseases and osteoarthritis; and multi-target strategic alliance with GSK to develop breakthrough treatments for people afflicted with Parkinson's disease; as well as collaboration with Flagship Pioneering to discover novel medicines and vaccines. The company was formerly known as GlaxoSmithKline plc and changed its name to GSK plc in May 2022. GSK plc was founded in 1715 and is headquartered in Brentford, the United Kingdom.dom.

How the Company Makes MoneyGlaxoSmithKline makes money primarily through the sale of its pharmaceutical products, vaccines, and consumer healthcare goods. The Pharmaceuticals segment generates revenue by developing and selling prescription medications targeting various therapeutic areas, including respiratory, HIV, oncology, and immuno-inflammation. The Vaccines division earns income by producing and distributing vaccines for diseases such as influenza, hepatitis, and HPV. The Consumer Healthcare segment contributes to revenue by offering a wide range of over-the-counter products, including pain relief, oral health, and nutritional supplements. GSK also engages in partnerships and collaborations with other pharmaceutical companies and institutions, which can provide additional income through licensing agreements and shared research initiatives. Key factors contributing to GSK's earnings include its strong research and development capabilities, a broad product portfolio, and a global distribution network.

GlaxoSmithKline Financial Statement Overview

Summary

GSK shows stable revenue growth and profitability, although margins have been pressured. The balance sheet indicates moderate leverage with a strong ROE, but the low equity ratio could pose risks. Cash flow generation is robust, yet declining free cash flow suggests challenges in cash retention. Overall, the company's financial health is stable, warranting attention to leverage and cash flow dynamics.

Income Statement

Positive

GSK's income statement reflects moderate profitability with a Gross Profit Margin of 71.2% and a Net Profit Margin of 8.2% for 2024. Despite a decline in EBIT Margin from 17.2% in 2023 to 12.8% in 2024, the company maintains a strong EBITDA Margin of 21.3%. Revenue growth rate shows a 3.5% increase from 2023 to 2024, indicating stable revenue expansion, although profitability has been somewhat pressured.

Balance Sheet

Neutral

The balance sheet shows a Debt-to-Equity Ratio of 1.24, indicating moderate leverage compared to industry standards. Return on Equity is healthy at 18.8% for 2024, showing effective use of equity. However, the Equity Ratio stands at 23.0%, suggesting a relatively low equity buffer against total assets, which could pose risks during financial downturns.

Cash Flow

Neutral

GSK's cash flow statement reveals a decrease in Free Cash Flow from 4.42 billion in 2023 to 3.57 billion in 2024, reflecting a negative growth rate of 19.2%. The Operating Cash Flow to Net Income Ratio is strong at 2.54, indicating robust cash generation relative to net income. However, the Free Cash Flow to Net Income Ratio has decreased to 1.39, suggesting less cash retained per profit unit.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
31.53B	31.38B	30.33B	29.32B	34.11B	34.10B
	Gross Profit
22.55B	22.33B	21.76B	19.77B	22.51B	22.39B
	EBIT
5.09B	4.02B	6.75B	6.43B	6.20B	7.78B
	EBITDA
8.24B	6.67B	9.14B	8.63B	7.76B	10.16B
	Net Income Common Stockholders
3.15B	2.58B	4.93B	4.92B	4.38B	5.75B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.49B	3.71B	4.99B	7.88B	4.33B	6.37B
	Total Assets
60.70B	59.46B	59.01B	60.15B	79.10B	80.43B
	Total Debt
0.00	16.99B	18.02B	20.99B	24.17B	27.15B
	Net Debt
-4.46B	13.29B	15.27B	17.26B	19.90B	20.86B
	Total Liabilities
47.05B	46.38B	46.21B	50.05B	57.76B	59.62B
	Stockholders Equity
14.16B	13.67B	13.35B	10.60B	15.05B	14.59B
Cash Flow		Free Cash Flow
3.64B	3.57B	4.42B	5.14B	5.02B	6.20B
	Operating Cash Flow
6.51B	6.55B	6.77B	7.40B	7.95B	8.44B
	Investing Cash Flow
-2.26B	-1.23B	-1.59B	-8.77B	-1.78B	2.16B
	Financing Cash Flow
-2.54B	-4.73B	-5.64B	823.00M	-7.59B	-10.13B

GlaxoSmithKline Technical Analysis

Technical Analysis Sentiment

Positive

Last Price38.40

Price Trends

50DMA

37.22

Positive

100DMA

36.06

Positive

200DMA

36.70

Positive

Market Momentum

MACD

0.19

Negative

RSI

58.62

Neutral

STOCH

81.76

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GSK, the sentiment is Positive. The current price of 38.4 is above the 20-day moving average (MA) of 37.40, above the 50-day MA of 37.22, and above the 200-day MA of 36.70, indicating a bullish trend. The MACD of 0.19 indicates Negative momentum. The RSI at 58.62 is Neutral, neither overbought nor oversold. The STOCH value of 81.76 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GSK.

GlaxoSmithKline Risk Analysis

GlaxoSmithKline disclosed 14 risk factors in its most recent earnings report. GlaxoSmithKline reported the most risks in the “Legal & Regulatory” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

GlaxoSmithKline Peers Comparison

Overall Rating

UnderperformOutperform

Sector (52)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AZN	78 Outperform	$214.85B	27.45	19.81%	2.18%	15.48%	22.70%
MRK	76 Outperform	$193.93B	11.07	39.31%	4.09%	4.40%	654.93%
SNY	71 Outperform	$126.44B	21.51	7.34%	2.83%	-4.57%	2.96%
GILD	70 Outperform	$132.06B	21.55	32.51%	2.92%	4.63%	1144.01%
PFE	66 Neutral	$129.80B	16.55	8.62%	7.35%	13.38%	―
GSK	63 Neutral	$75.63B	19.47	22.26%	4.03%	4.17%	-29.96%
Sector *	52 Neutral	$5.19B	3.04	-44.20%	2.82%	16.59%	-0.39%

* Healthcare Sector Average

Performance Comparison

GSK

GlaxoSmithKline

38.40

-4.22

-9.90%

AZN

AstraZeneca

69.92

-7.70

-9.92%

GILD

Gilead Sciences

109.11

44.25

68.22%

MRK

Merck & Company

77.97

-49.03

-38.61%

PFE

Pfizer

23.52

-3.25

-12.14%

SNY

Sanofi

52.89

5.45

11.49%

GlaxoSmithKline Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q1-2025)

% Change Since: -0.34%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong growth in specialty medicines and promising R&D advancements, positioning GSK for continued success. However, challenges such as declining vaccine sales, macroeconomic uncertainties, and impacts from Medicare Part D redesign were notable concerns. Despite these issues, the overall sentiment remains positive due to strategic growth areas and confident long-term outlooks.

Q1-2025 Updates

Positive Updates

Strong Sales and Earnings Growth

Group sales increased by 4%, core operating profit grew by 5%, and core earnings per share rose by 5% to 44.9 pence. Cash generated from operations was over £1 billion.

Specialty Medicines Performance

Specialty medicines, the largest business segment, grew by 17%, driven by contributions from respiratory immunology, oncology, and HIV.

Oncology Segment Growth

Oncology sales increased by 53%, with notable performances from Jemperli and AGILE, which more than doubled their sales.

HIV Treatment and Prevention Growth

HIV sales grew by 7%, driven by products like Dovato, Cabenuva, and Apretude, which saw growth of 19%, 38%, and 63% respectively.

R&D and Pipeline Progress

Two out of five expected FDA product approvals for 2025 have been secured. Promising assets like the ADC targeting B7H3 and the acquisition of IDRX enhance the oncology pipeline.

Positive Long-term Outlook

GSK remains confident in its medium and long-term growth prospects, with multiple product launches and FDA approvals anticipated in the coming years.

Negative Updates

Vaccine Sales Decline

Vaccine sales were down 6%, with Shingrix sales declining by 7% due to lower sales in the U.S. and international markets.

Impact of Medicare Part D Redesign

The redesign posed a significant financial headwind, with a projected impact of £400 million to £500 million throughout the year, primarily affecting HIV and specialty medicines.

Challenges in China

Shingrix sales in China were impacted by agreed lower supply to a co-promotion partner, and broader macroeconomic challenges were noted.

Tariffs and Macroeconomic Concerns

Potential sector tariffs and elevated levels of macroeconomic uncertainty pose risks, though GSK noted strategies to navigate these challenges.

Company Guidance

During GSK's Q1 2025 earnings call, the company reaffirmed its financial guidance for the year, reflecting strong performance and strategic advancements. Key metrics highlighted include a 4% increase in group sales, 5% growth in core operating profit, and 5% rise in core earnings per share to 44.9 pence. Specialty medicines drove sales growth with a 17% increase, whereas vaccine sales declined by 6% and general medicine sales remained stable. The company secured two out of the five FDA product approvals anticipated for 2025 and completed the acquisition of IDRX, enhancing its oncology pipeline. GSK generated over £1 billion in cash from operations, supporting its £2 billion share buyback program and increased dividend to 16 pence. The company maintained its trust goals, reaching an estimated 2 billion people with its vaccines and medicines over the past four years. Additionally, GSK confirmed its commitment to R&D productivity improvements and future growth opportunities, with 14 key pipeline opportunities expected to launch between 2025 and 2031, each having peak year sales potential of over £2 billion.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.