GlaxoSmithKline (GSK) AI Stock Analysis

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GlaxoSmithKline

(NYSE:GSK)

65Neutral

GSK's overall stock score reflects its stable financial performance and strong earnings call guidance, highlighting growth in specialty medicines and a positive strategic outlook. While the technical analysis suggests caution with current market momentum, the valuation remains attractive with a notable dividend yield. The absence of significant new corporate events focuses the evaluation on existing financial and strategic data.

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

Market Cap

$72.44B

Dividend Yield4.2%

Average Volume (3M)5.67M

Price to Earnings (P/E)22.6

Beta (1Y)0.19

Revenue Growth6.28%

EPS Growth-47.11%

CountryUS

Employees68,629

SectorHealthcare

Sector Strength64

IndustryDrug Manufacturers - General

Share Statistics

EPS (TTM)1.60

Shares Outstanding2,058,131,800

10 Day Avg. Volume6,588,473

30 Day Avg. Volume5,666,123

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.99

Price to Cash Flow (P/CF)15.10

P/FCF Ratio23.50

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$40.08

Price Target Upside9.42% Upside

Rating ConsensusHold

Number of Analyst Covering3

GlaxoSmithKline Business Overview & Revenue Model

Company DescriptionGlaxoSmithKline (GSK) is a leading global healthcare company that researches, develops, and manufactures innovative pharmaceutical medicines, vaccines, and consumer healthcare products. The company operates in three main segments: Pharmaceuticals, Vaccines, and Consumer Healthcare. GSK's core products include treatments for respiratory diseases, HIV, immuno-inflammation, and oncology, as well as a broad range of vaccines and over-the-counter consumer health products.

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's financial performance is stable with moderate revenue growth and profitability. Despite a decline in margins, the company maintains strong cash generation. However, the balance sheet shows moderate leverage, and declining free cash flow indicates potential cash retention challenges.

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.

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

GlaxoSmithKline Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price36.63

Price Trends

50DMA

37.46

Negative

100DMA

35.69

Positive

200DMA

37.14

Negative

Market Momentum

MACD

-0.59

Negative

RSI

49.92

Neutral

STOCH

94.76

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GSK, the sentiment is Neutral. The current price of 36.63 is above the 20-day moving average (MA) of 36.55, below the 50-day MA of 37.46, and below the 200-day MA of 37.14, indicating a neutral trend. The MACD of -0.59 indicates Negative momentum. The RSI at 49.92 is Neutral, neither overbought nor oversold. The STOCH value of 94.76 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (51)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MRK	74 Outperform	$195.90B	11.56	40.81%	4.06%	6.85%	4577.79%
AZN	73 Outperform	$209.32B	29.91	17.60%	2.27%	18.03%	18.11%
SNY	70 Outperform	$125.03B	21.43	7.34%	2.90%	-4.57%	2.96%
GILD	68 Neutral	$131.53B	275.84	2.28%	2.97%	6.16%	-91.54%
PFE	68 Neutral	$127.78B	15.99	9.05%	7.67%	8.77%	272.80%
GSK	65 Neutral	$72.44B	22.58	19.11%	4.20%	6.28%	-47.11%
Sector *	51 Neutral	$5.20B	3.18	-40.80%	2.96%	17.66%	1.94%

* Healthcare Sector Average

Performance Comparison

GSK

GlaxoSmithKline

36.63

-2.68

-6.82%

AZN

AstraZeneca

67.87

-1.93

-2.77%

GILD

Gilead Sciences

105.51

40.86

63.20%

MRK

Merck & Company

78.97

-44.37

-35.97%

PFE

Pfizer

22.53

-2.19

-8.86%

SNY

Sanofi

51.85

6.62

14.64%

GlaxoSmithKline Earnings Call Summary

Earnings Call Date: Feb 5, 2025 | % Change Since: 6.27% | Next Earnings Date: Apr 30, 2025

Earnings Call Sentiment Positive

The earnings call reflects strong financial performance and growth in specialty medicines, particularly in oncology and HIV. However, there are notable challenges in the vaccines segment and financial impacts from litigation and regulatory changes. Overall, the positive aspects and future growth prospects outweigh the current challenges.

Highlights

Strong Financial Performance

Sales grew 8% to over £31 billion, core operating profit increased by 13%, and core EPS rose by 12% for 2024. This performance led to two upgrades in guidance and an increased dividend of 61p per share.

Specialty Medicines and Oncology Growth

Specialty medicines saw a 19% growth with oncology sales nearly doubling to over £1.4 billion. Blenrep is expected to launch with a significant potential impact on future sales.

HIV Segment Success

HIV sales increased by 13% in 2024, driven by strong demand for Cabenuva and Apretude, with a 47% growth for Cabenuva reaching over £1 billion.

Strong Balance Sheet and Shareholder Returns

Net debt reduced to £13 billion, and a £2 billion share buyback program was announced, alongside a 5% increase in the dividend.

R&D Achievements and Pipeline Progress

13 positive Phase 3 readouts were achieved in 2024, with new product approvals expected in 2025 for Blenrep, depemokimab, and others.

Lowlights

Vaccines Segment Challenges

Vaccine sales decreased by 3% due to lower sales of Arexvy in the U.S. and challenges in China. Short-term pressures in the U.S. vaccine market are anticipated to continue into 2025.

Impact of U.S. Inflation Reduction Act

The Inflation Reduction Act is expected to have a £150 million to £200 million impact on revenues in 2025.

Zantac Litigation Settlement

A £1.8 billion charge was recorded due to the resolution of the Zantac litigation, affecting the total operating profit for 2024.

Company Guidance

During the call, GSK outlined its strong performance for 2024, highlighting an 8% increase in sales to over £31 billion and a 13% rise in core operating profit, which contributed to a 12% growth in core EPS. The company upgraded its guidance twice in 2024 and announced a dividend increase to 61p per share. Specialty medicines showed robust momentum with double-digit growth across all therapy areas, notably doubling oncology sales to over £1.4 billion. GSK anticipates further growth in 2025, expecting sales to increase by 3% to 5% and core operating profit by 6% to 8%, supported by promising pipeline developments, including five new product approvals. The company's long-term outlook was revised upward, projecting risk-adjusted sales exceeding £40 billion by 2031, with more than 50% of sales driven by Specialty Medicines. Additionally, GSK announced plans for a £2 billion share buyback over 18 months, reflecting confidence in its strategic trajectory and balance sheet strength.

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.