The shares of British pharmaceutical company GSK soared Wednesday, after it raised its long term sales forecasts and announced strong financial results by 2024.
Stocks rose 5.9% during early trading to become the best performers on the FTSE 100. They are on course for their biggest single-day gains since 2022.
GSK has increased its sales forecast for 2031 to over PS40 billion from the previous estimated PS38 billion.
This upward revision is a reflection of the confidence that the company has in its pipeline. It includes specialty drugs, HIV treatment, oncology, and other specialties.
GSK announced that it expects its sales to grow by 3 percent in 2024 and reach PS31,4 billion.
This represents a 7 % increase at constant exchange rates.
The performance of the company’s HIV and specialty drugs was key to its growth, which offset weaker sales in vaccines.
GSK earnings rise despite Zantac litigation charge
GSK’s core operating profits grew 11%, at constant rates of exchange. This shows a strong business foundation.
The total operating profit fell by 40%, to PS4 billion. This was due to an one-off charge of PS1.8 billion related to settlement claims for Zantac.
The company is still optimistic about the future despite the costs of the litigation.
GSK projects revenue growth between 3 and 5 percent at constant rates of exchange in 2025. Core operating profits are projected to increase by 6 to 8 percent.
Its “outstanding” pipeline of late-stage drugs fuels the company’s optimism.
GSK CEO Emma Walmsley highlighted GSK’s commitment to investment in R&D to further innovate in respiratory, immune, oncology and HIV treatments.
GSK to buy back shares worth PS2 billion and forecast share prices
GSK announced that it also plans to increase shareholder returns.
The company announced a dividend of 16p for the fourth quarter and plans to raise its total dividend to 64p by 2025, from 61p in 2018.
GSK also announced a PS2billion share-buyback program that will be implemented over the next 12 months. This is a measure to return capital to investors and signal confidence in GSK’s future growth.
Some analysts are cautious despite the market’s strong reaction.
Richard Hunter, the head of Interactive Investor’s markets, stated:
The market’s consensus is that GSK shares are a good investment.
GSK’s future strategy focuses on expanding GSK’s presence and strengthening pipeline in important therapeutic areas.
GSK has a solid drug pipeline and is committed to shareholder return. This will allow it to grow in the future.
The post GSK share prices surge by around 6% after drugmaker increases sales targets and raises dividends could be updated as new information becomes available
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