GSK slips as vaccine outlook is slashed

Investing.com – GSK(LON:GSK)'s second-quarter results exceeded expectations with strong sales and profits, leading to an upward revision of the outlook. However, a cut in the vaccine sales target has led to a dip in the company’s shares.

Total sales reached £7.9 billion, up 13% year-over-year. ore operating profit surged 18%, reflecting improved operational efficiency, while core EPS grew 13%. Specialty Medicines led the way with a 22% increase, bolstered by new oncology and HIV products.

GSK's overall sales were 5% ahead of consensus in the second quarter. Specialty medicines performed particularly well, exceeding expectations by 6%, driven by strong sales of Dovato and a launch of Ojjaara, said analysts at Jefferies in a note.

General medicines saw a 17% beat, largely due to the success of Trelegy and legacy drugs. However, vaccine sales missed expectations by 9%, primarily due to weak Shingrix sales in the US, despite Arexvy performing as expected, the analysts added.

This strong top-line performance drove adjusted EBIT and EPS to beat expectations by 12%, underscoring the company's robust financial health.

GSK has upgraded its full-year outlook, anticipating sales growth between 7% and 9%, core operating profit growth of 11% to 13%, and core EPS growth of 10% to 12%, all at constant exchange rates.

Jefferies retains a 'Buy' rating on GSK, emphasizing the company's strong growth profile in long-acting HIV injectables and new pipeline launches. Additionally, the potential Zantac class action settlement presents a significant risk-reward opportunity.

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