GSK Stock Rises Almost 22% in 6 Months: Time to Buy, Sell or Hold?
GSK GSK stock has risen 21.5% in the past six months. The consistently strong performance of the Specialty Medicines unit, regulatory and pipeline successes and an optimistic outlook for the long term are the key factors driving the increase amid several headwinds like slowing sales in the Vaccines unit, generic competition for some drugs and broader economic pressure.
Let's discuss these factors in detail to understand how to play GSK's stock amid the recent price increase.
GSK Specialty Medicines Unit on a Strong Footing
GSK is witnessing increased sales growth of its Specialty Medicines unit, particularly reflecting successful new launches in Oncology and long-acting HIV medicines. Sales are rising in all areas, HIV, Immunology/Respiratory as well as Oncology. Sales of the Specialty Medicines unit rose 19% in 2024, driven by double-digit growth in all therapy areas. The positive trend continues in 2025 with sales rising 17% in the first quarter of 2025.
In the segment, while products like Nucala and Dovato are key top-line drivers, new long-acting HIV medicines, Cabenuva and Apretude, as well as new oncology drugs Jemperli and Ojjaara, are also witnessing strong patient demand and contributing to top-line growth. In 2025, the company expects sales in the Specialty Medicines segment to rise in a low double-digit percentage at CER, despite the impact from the Inflation Reduction Act or IRA. Specialty Medicines, which now accounts for around 40% of GSK's sales, is expected to be more than 50% of GSK's total revenue by 2031.
GSK's Promising Pipeline
GSK is increasing R&D investment in promising new long-acting and specialty medicines in Respiratory, Immunology & Inflammation, Oncology and HIV areas.
GSK's pentavalent MenABCWY meningococcal vaccine and Blujepa/gepotidacin for treating uncomplicated urinary tract infection ('UTI') were approved in the United States in the first quarter of 2025. Its blockbuster drug Nucala was approved for treating chronic obstructive pulmonary disease or COPD, its fifth indication, in May 2025.
Regulatory applications seeking approval of the Blenrep combination for relapsed/refractory multiple myeloma and depemokimab for two indications (chronic rhinosinusitis with nasal polyps or CRSwNP and asthma with type II inflammation) are under review in the United States and some other countries. FDA decisions on all these filings are expected in 2025. Blenrep combinations were approved in the United Kingdom and Japan in April/May 2025.
In 2025, GSK expects to launch five new products/line extensions, including Blenrep, depemokimab (severe asthma and CRSwNP), Nucala for COPD, Penmenvy and Blujepa. Of these, Penmenvy, Blujepa and Nucala for COPD are already approved in the United States.
GSK's Vaccine Sales Slowing Down
GSK's first-quarter Vaccine sales declined 6% due to lower sales of its RSV vaccine, Arexvy, and shingles vaccine, Shingrix.
U.S. sales of Shingrix declined 21% in the first quarter of 2025 due to lower demand as a result of challenges in activating harder-to-reach consumers. Arexvy's global sales declined 57% in the first quarter.
Revised recommendations for RSV vaccinations issued in June 2024 by the U.S. Advisory Committee on Immunization Practices (ACIP) have been hurting sales of Arexvy from the second half of 2024 in the United States. In June, the ACIP recommended the use of Arexvy for all adults aged 75 and above. However, for adults aged 60-74, the ACIP recommended the vaccine only for those who are at increased risk of severe RSV disease.
A challenging macro environment in China and potential for changes in vaccination policies in the United States are expected to hurt Vaccine sales in the near term. In 2025, the company expects sales in the Vaccines segment to decline by a low single-digit percentage at CER.
GSK's Price Performance, Valuation & Estimate Movement
GSK stock has risen 20.1% year to date compared with an increase of 4.0% for the industry. The stock has also outperformed the sector and the S&P 500 index, as seen in the chart below. The stock has also been trading above 200 and 50-day moving averages since May.
GSK Stock Outperforms Industry, Sector and S&P
GSK's stock is trading at an attractive valuation relative to the industry. Going by the price/earnings ratio, the company's shares currently trade at 8.63 on a forward 12-month basis, lower than 15.63 for the industry. The stock also trades below its 5-year mean of 10.25. The stock is much cheaper than several other large drugmakers like Eli Lilly LLY, Novo Nordisk NVO, AbbVie ABBV and AstraZeneca.
GSK Stock Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for earnings has risen from $4.26 to $4.42 per share for 2025 and from $4.71 to $4.82 per share for 2026 over the past 60 days.
GSK's Estimates
Stay Invested in GSK Stock
GSK has its share of problems. Competitive pressure on HIV and respiratory drugs has risen. The dolutegravir HIV franchise patent expires in the 2028-2029 period, and U.S. vaccine sales are slowing down. In 2025, GSK also expects a negative sales impact of £400-500 million due to the impact of the IRA Medicare Part D redesign.
However, the company is consistently growing its sales and profits, mainly driven by its Specialty Medicines segment.
For the five-year period till 2026, GSK expects to record more than 7% sales growth while core operating profit is expected to increase more than 11% on a CAGR basis. In this period, Specialty Medicines is expected to rise in the low-to-mid teens percentage while General Medicines is expected to rise by a low single-digit percentage. The growth in Specialty Medicines and improvement in General Medicines are making up for a slowdown in the Vaccines unit.
The company also resolved the vast majority of Zantac litigations in 2024, which had long been an overhang on the stock. GSK believes it is well-positioned to navigate and mitigate the potential financial impact of tariffs on pharmaceutical imports through supply chain and increased productivity initiatives
We suggest investors who own this Zacks Rank #3 (Hold) stock stay invested for now, considering steady sales and profit improvement in the coming years. Consistently rising estimates also reflect analysts' optimistic outlook for future growth in profits. Buying the stock at its present cheap valuation can prove prudent for long-term investors who are interested in buying blue-chip companies. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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