GSK Earnings: In-Line Results; Weak Vaccine Sales Offset by Strong Growth in Specialty Medicines

Wide-moat GSK’s third-quarter earnings aligned with our expectations, and management reaffirmed its prior full-year guidance. We maintain our fair value estimate of GBX 2,200 per ordinary share, corresponding to an increased ADR fair value of $58 (from $54) due to currency fluctuations. Although the Zantac settlement resolution announced earlier this month significantly reduced GSK’s litigation uncertainty, the recent meeting of the US Advisory Committee on Immunization Practices has led management to reduce near-term guidance for sales of RSV vaccine Arexvy.