GSK Earnings: Mid-Term Outlook Revised Upward; Fair Value Unchanged, Shares Undervalued

Wide-moat GSK’s fourth-quarter earnings were in line with our expectations. The company also revised its expectation for risk-adjusted revenue in 2031 upward to GBP 40 billion, an increase of GBP 2 billion. Although it lowered its outlook for vaccines, including Arexvy, this was more than offset by new revenue contribution from oncology drug Blenrep and various late-stage pipeline assets. Although this guidance is more optimistic than our own outlook, we continue to view the stock as undervalued and maintain our fair value estimates of GBX 2,200 per ordinary share and $58 per US ADR.