Now trading at a price of $35.26, GSK has moved 1.2% so far today. In contrast, the S&P 500 index moved -0.6%. Read below for a basic value analysis of Series([], ).
GSK shares moved -22.6% over the last 52 weeks, with a high of $46.97 and a low of $28.47. During this time, the stock lagged the S&P 500 index by -14.8%. As of January 2022, the company's 50-day average price is $35.18. GSK plc, together with its subsidiaries, engages in the creation, discovery, development, manufacture, and marketing of pharmaceutical products, vaccines, over-the-counter medicines, and health-related consumer products in the United Kingdom, the United States, and internationally. The large-cap Healthcare company is based in Brentford, United Kingdom. GSK has not offered any dividends in the last year.
Thinner Operating Margins Than the 27.39% Industry Average:
2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
---|---|---|---|---|
Revenue (MM) | $33,754 | $34,099 | $34,114 | $29,324 |
Revenue Growth | n/a | 1.02% | 0.04% | -14.04% |
Gross Margins | 64.8% | 65.7% | 66.0% | 67.4% |
Gross Margins Growth | n/a | 1.39% | 0.46% | 2.12% |
Operating Margins | 18.6% | 18.2% | 19.6% | 21.9% |
Operating Margins Growth | n/a | -2.15% | 7.69% | 11.73% |
Earnings Per Share | $2.32 | $2.85 | $2.16 | $7.32 |
EPS Growth | n/a | 22.84% | -24.21% | 238.89% |
Free Cash Flow (MM) | $5,857 | $6,202 | $5,021 | $5,145 |
FCF Growth | n/a | 5.89% | -19.04% | 2.47% |
Capital Expenditures (MM) | -$2,163 | -$2,239 | -$2,931 | -$2,258 |
Net Debt / EBITDA | 2.83 | 2.34 | 2.12 | 0.03 |
GSK Is Fairly Priced at Current Levels:
Compared to the Healthcare sector's average of 13.21, GSK has a trailing twelve month P/E ratio of 13.1 and, according to its EPS guidance of 4, an expected P/E ratio of 8.8. GSK's PEG ratio is 0.27 based on its 48.25% annual average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 13.05%, because the growth rate implied by GSK's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 1.0, which still suggests that company's shares are still possibly undervalued.
GSK's P/B ratio is 6.7 compared to its sector average of 4.07. The company is likely overvalued in terms of its equity. The company's shares are currently trading 69.4% above their fair value as expressed by Benjamin Graham's formula:
√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 3.66 * 5.26) = $20.81
GSK's elevated P/B ratio notwithstanding, the company's strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued.
Most of the Market Indicators on GSK Are Negative:
4 analysts are following GSK and have set target prices ranging from $35.5 to $63.75 per share. On average, they have given the company a rating of hold. At the current price of $35.26, GSK is trading -20.05% away from its average analyst target price of $44.11 per share, implying an analyst consensus of strong upside potential for the stock.