Core Insights - GSK plc reported second-quarter 2025 core earnings of $1.23 per American depositary share (ADS), exceeding the Zacks Consensus Estimate of $1.12, with a year-over-year increase of 7% on a reported basis and 15% at a constant exchange rate (CER) [1][9] - Quarterly revenues rose 1% on a reported basis and 6% at CER to $10.67 billion (£7.99 billion), driven by increased sales of HIV, oncology, and vaccine products, surpassing the Zacks Consensus Estimate of $10.33 billion [2][9] Segment Performance - GSK operates under three segments: General Medicines, Specialty Medicines, and Vaccines. Specialty Medicines sales increased by 15%, while Vaccine sales rose by 9%. General Medicines experienced a decline of 6% [3][9] - HIV sales grew by 12%, supported by increased demand for Dovato and long-acting medications Apretude and Cabenuva, with Apretude and Cabenuva sales rising by 50% and 46%, respectively [4][6] - Oncology sales surged by 42%, driven by strong demand for Jemperli and Ojjaara/Omjjara, with Jemperli sales increasing by 91% [6][7] - Vaccine sales were bolstered by increased uptake of meningitis and shingles vaccines, with Shingrix sales rising by 6% [12] Financial Guidance - GSK raised its 2025 sales and profit guidance, now expecting sales to increase toward the top end of the previously issued range of 3-5%, with Specialty Medicines projected to grow at a low teens percentage at CER [15][16] - The company anticipates core operating profit and core EPS to grow toward the top end of the previously issued guided range of 6-8% [16][17] Long-term Strategy - GSK has prioritized focus on HIV, immunology/respiratory, and oncology therapeutic areas, with 84 assets in clinical development, including 16 candidates in late-stage development or under regulatory review [24] - The company plans to launch five new products/line extensions in 2025, with three already approved in the first half of the year [25][26]

Core Insights - GSK's Specialty Medicines segment is a significant contributor to its sales, accounting for nearly 40% of total revenue and expected to exceed 50% by 2031 [6] Sales Growth - The Specialty Medicines unit has experienced a 17% sales increase in Q1 2025, driven by successful launches in Oncology and long-acting HIV medicines [2][10] - Key products such as Nucala and Dovato are major revenue drivers, alongside new long-acting HIV treatments like Cabenuva and Apretude, and oncology drugs Jemperli and Ojjaara [3] Research and Development - GSK is increasing R&D investments in long-acting and specialty medicines across various therapeutic areas, including Respiratory, Immunology & Inflammation, Oncology, and HIV [4] - The approval of Blujepa for uncomplicated urinary tract infections and Nucala for chronic obstructive pulmonary disease (COPD) supports the growth trajectory [4][10] Regulatory Approvals - Regulatory applications for Blenrep combinations for multiple myeloma and depemokimab for chronic rhinosinusitis and asthma are under review, with FDA decisions expected in 2025 [5] Competitive Landscape - GSK faces significant competition in the Specialty Medicines segment from major pharmaceutical companies such as AstraZeneca, Merck, and Pfizer [7][8] Stock Performance and Valuation - GSK's stock has increased by 16.3% year-to-date, outperforming the industry average of 0.3% [9] - The company's shares are trading at a forward price/earnings ratio of 8.34, which is lower than the industry average of 14.93 and below its 5-year mean of 10.21 [12] Earnings Estimates - The Zacks Consensus Estimate for GSK's earnings per share has risen from $4.38 to $4.41 for 2025, while the estimate for 2026 has slightly declined [14]

Core Insights - GSK stock has increased by 21.5% over the past six months, driven by strong performance in the Specialty Medicines unit, regulatory successes, and a positive long-term outlook despite challenges in the Vaccines unit and economic pressures [2][22]. Specialty Medicines Unit Performance - The Specialty Medicines unit has shown significant sales growth, with a 19% increase in 2024 and a 17% rise in Q1 2025, primarily due to successful launches in Oncology and long-acting HIV medicines [3][4]. - Key products driving growth include Nucala, Dovato, Cabenuva, Apretude, Jemperli, and Ojjaara, with expectations for low double-digit sales growth in 2025 despite the Inflation Reduction Act's impact [4][9]. - Specialty Medicines currently accounts for approximately 40% of GSK's sales and is projected to exceed 50% by 2031 [4]. Promising Pipeline Developments - GSK is increasing R&D investments in long-acting and specialty medicines across various therapeutic areas, including Respiratory, Immunology & Inflammation, Oncology, and HIV [5]. - Recent approvals include the pentavalent MenABCWY vaccine and Blujepa for UTI treatment, with Nucala receiving approval for COPD in May 2025 [5][6]. - GSK anticipates launching five new products in 2025, including Blenrep and depemokimab, with several already approved in the U.S. [7]. Vaccine Sales Challenges - Vaccine sales declined by 6% in Q1 2025, primarily due to lower demand for the RSV vaccine Arexvy and shingles vaccine Shingrix [8][10]. - Shingrix sales fell by 21% in Q1 2025, and Arexvy's global sales dropped by 57%, attributed to revised vaccination recommendations and challenges in reaching consumers [10][11]. - The company expects a low single-digit percentage decline in Vaccine sales for 2025 due to macroeconomic challenges and potential policy changes [12]. Stock Performance and Valuation - GSK stock has outperformed the industry and S&P 500, rising 20.1% year-to-date compared to a 4.0% industry increase [13]. - The stock trades at a forward P/E of 8.63, below the industry average of 15.63, indicating an attractive valuation relative to peers [17]. - Earnings estimates for 2025 have increased from $4.26 to $4.42 per share, reflecting analysts' positive outlook for future growth [20]. Future Growth Expectations - GSK anticipates over 7% sales growth and more than 11% core operating profit growth on a CAGR basis from 2021 to 2026, driven by Specialty Medicines and improvements in General Medicines [23]. - The company has resolved most Zantac litigations, alleviating a significant overhang on the stock [25].

Core Viewpoint - GSK plc is expected to exceed earnings expectations in the first quarter of 2025, with a consensus estimate for sales at $9.54 billion and earnings at $1.08 per American depositary share (ADS) [1] Factors Shaping GSK's Upcoming Results - GSK's financial performance is segmented into Specialty Medicines, Vaccines, and General Medicines [1] - Newer products such as Cabenuva, Juluca, Dovato, Nucala, Ojjaara, Jemperli, and Trelegy Ellipta are anticipated to drive sales, compensating for declines in older HIV drugs and respiratory medicines due to generic competition [2] - The HIV portfolio is projected to generate sales of £1.71 billion, driven by strong growth in two-drug regimens Dovato and Juluca, as well as long-acting regimens Cabenuva and Apretude [3] - Vaccine sales are expected to decline, with projections of £2.2 billion, influenced by lower demand for Shingrix and restrictive recommendations for Arexvy [4][5] - Oncology sales are likely to grow, with expectations of £380 million from Jemperli, Zejula, and Ojjaara, alongside respiratory drugs Trelegy Ellipta and Nucala contributing £677 million and £403 million, respectively [6] GSK's Earnings Surprise History - GSK has consistently surpassed earnings estimates in the past four quarters, achieving an average surprise of 11.44% [7] - Year-to-date, GSK's shares have increased by 11%, outperforming the industry, which has seen a 5% decline [7] Earnings Prediction Model - GSK has a positive Earnings ESP of +3.16% and a Zacks Rank of 3, indicating a strong likelihood of an earnings beat [9]