We've been asking ourselves recently if the market has placed a fair valuation on GSK. Let's dive into some of the fundamental values of this Large-Cap Health Care company to determine if there might be an opportunity here for value-minded investors.
an Increase in Expected Earnings Improves Its Value Outlook but Its Shares Are Expensive:
GSK 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. The company belongs to the Health Care sector, which has an average price to earnings (P/E) ratio of 22.94 and an average price to book (P/B) ratio of 3.19. In contrast, GSK has a trailing 12 month P/E ratio of 19.2 and a P/B ratio of 11.28.
GSK has moved -10.1% over the last year compared to 9.8% for the S&P 500 — a difference of -19.8%. GSK has a 52 week high of $45.93 and a 52 week low of $31.72.
Wider Gross Margins Than the Industry Average of 57.85%:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $33,754 | $24,354 | $24,696 | $29,324 | $30,328 | $31,376 |
| Gross Margins | 65% | 67% | 67% | 67% | 72% | 71% |
| Net Margins | 16% | 26% | 21% | 53% | 18% | 9% |
| Net Income (M) | $5,268 | $6,388 | $5,096 | $15,621 | $5,308 | $2,951 |
| Diluted Shares (M) | 5,383 | 5,385 | 5,387 | 4,311 | 4,312 | 4,314 |
| Earnings Per Share | $0.93 | $1.43 | $1.08 | $3.66 | $1.2 | $0.62 |
| EPS Growth | n/a | 53.76% | -24.48% | 238.89% | -67.21% | -48.33% |
| Free Cash Flow (M) | $8,020 | $8,441 | $7,952 | $7,403 | $6,768 | $6,554 |
| Total Debt (M) | $23,590 | $23,425 | $20,572 | $17,035 | $15,205 | $14,637 |
| Net Debt / EBITDA | 2.03 | 2.13 | 2.52 | 1.55 | 1.36 | 1.64 |
| Current Ratio | 0.81 | 0.91 | 0.79 | 0.91 | 0.88 | 0.78 |
