It has been about a month since the last earnings report for GSK (GSK). Shares have lost about 2.1% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Glaxo due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for GSK PLC Sponsored ADR before we dive into how investors and analysts have reacted as of late.
Q1 Earnings & Sales Beat Estimates
GSK reported first-quarter 2026 core earnings of $1.24 per American depositary share (ADS), which beat the Zacks Consensus Estimate of $1.16. Core earnings rose 4% year over year on a reported basis and 9% at a constant exchange rate (CER), driven by higher sales, favorable mix, lower SG&A costs and higher royalty income.
Quarterly revenues rose 2% on a reported basis and 5% at CER to $10.28 billion (£7.63 billion), driven mainly by strong performance of the Specialty Medicines segment. Vaccine sales also improved in the quarter. Revenues also beat the Zacks Consensus Estimate of $10.19 billion
Sales in the United States rose 6%. Sales in Europe rose 14%, while those in International markets declined 6% at CER.
All growth rates mentioned below are on a year-on-year basis and at CER.
Quarterly Highlights
GSK reports under three segments: Specialty Medicines, Vaccines and General Medicines. Specialty Medicines, Vaccines and General Medicines are clubbed as commercial operations.
Specialty Medicines
Sales in the Specialty Medicines segment increased 14%. Sales grew in double digits in all areas — HIV, Immunology/Respiratory, as well as Oncology.
HIV sales rose 10% in the quarter, driven by an increase in patient demand for Dovato and long-acting regimens, Apretude and Cabenuva. Sales in the quarter also benefited from favorable pricing due to the U.S. channel mix, which offset the impact of regional pricing pressures.
GSK generates the majority of its HIV sales from its dolutegravir franchise, comprising three-drug regimens — Triumeq and Tivicay — and two-drug regimens — Dovato and Juluca.
Sales from its dolutegravir franchise rose 4% in the quarter. Sales of the dolutegravir franchise rose 6% in the United States 1% in International markets. Sales were flat in Europe.
Tivicay sales rose 2% during the quarter, while those of Triumeq fell 27%.
Dovato sales rose 20%, while Juluca declined 2%.
In long-acting medicines, sales of Cabenuva rose 31%, driven by strong patient demand and accelerated switches from competitor products. Apretude rose 44% driven by strong demand despite rising competitive pressure. These two long-acting medicines contributed 73% of the total HIV growth in the quarter and now account for nearly 34% of HIV sales.
Oncology sales rose 28%, driven by strong demand for Jemperli, Ojjaara/Omjjara and Blenrep, partially offset by a decrease in Zejula.
Jemperli sales rose 40%, driven by increased patient uptake across the United States and Europe following approval for a broader patient population.
New blood cancer drug Ojjaara/Omjjara rose 34%, primarily driven by continued uptake in the United States and continued commercial launches across Europe and international markets. U.S. volume growth was partly offset by ongoing pricing pressures.
Zejula sales fell 11% in the quarter due to FDA labeling restrictions in the United States and increased competition across ex-U.S. territories.
Blenrep combos, launched in the United Kingdom and the United States, recorded £23 million in sales in the quarter.
Respiratory, Immunology & Inflammation sales rose 16% in the quarter, driven by Nucala and Exdensur in respiratory and Benlysta in immunology.
Sales of Nucala were up 12% during the quarter, mainly driven by strong demand across all markets. U.S. growth was driven by a broad COPD label and continued growth in other indications, partially offset by continued pricing pressures and channel mix impacts. At the call, the company mentioned that it is seeing strong early launch uptake for COPD in Europe and China.
New drug, Exdensur generated revenues of £11 million in the quarter. The company said that access in the United States for Exdensur is limited until obtaining the J-code, which is expected to occur in early July.
Sales of Benlysta rose 13% in the quarter, reflecting strong product demand across all marketed territories. Benlysta sales benefited from bio-penetration growth from earlier intervention in SLE and lupus nephritis.
Sales of Specialty Medicines are expected to increase by a low double-digit percentage at CER in 2026.
General Medicines
Sales of General Medicines declined 6% in the quarter due to declining sales of the older established portfolio. In General Medicines, Respiratory sales declined 4% at CER, while Other General Medicines sales declined 12%.
Trelegy Ellipta was flat year over year during the quarter. U.S. sales declined because of increasing co-pay requirements due to Medicare redesign and unfavorable pricing and channel mix. Strong volume growth in Europe and international markets was driven by patient demand.
At the call, the company said that the Medicare redesign impact will be less relevant in the remaining quarters of 2026.
While Anoro Ellipta sales increased 2%, sales of Relvar/Breo Ellipta declined 12%. Ventolin sales declined 19%.
While Advair/Seretide sales declined 11%, sales of Flixotide/Flovent increased 35%.
Sales in the General Medicines unit are expected to be broadly stable to down by a low single-digit percentage in 2026 due to pricing pressures and generic competition on some established products.
Vaccines
GSK’s Vaccine sales rose 4%, as higher sales of Shingrix were partially offset by lower sales of Arexvy and Other Paediatric & Adult vaccines.
Arexvy declined 18% during the quarter as growth in Europe was offset by lower sales in the United States due to slower market demand.
Shingrix sales rose 20% during the quarter as higher sales in the United States and Europe made up for lower sales in international markets. U.S. sales of the vaccine rose 12% in the quarter, gaining from favorable channel inventory movement, including the launch of a pre-filled syringe presentation. In Europe, Shingrix sales grew 51% following uptake in national immunization programs and private market demand. Sales of Shingrix declined 10% in International Markets.
However, GSK expects growth to become harder in Europe and Japan later this year due to tough comparison with strong sales from large vaccination programs launched last year
In Meningitis vaccines, sales of Bexsero rose 5%, while Menveo sales declined 25%.
The newly launched vaccine, Penmenvy, recorded sales of £6 million in the quarter.
Influenza vaccine sales rose more than 100% during the quarter.
Sales of Other Paediatric & Adult vaccines (previously known as Established vaccines) fell 9%, owing to competitive pressure for Synflorix, primarily in Emerging Markets and lower sales for Hepatitis, Boostrix and Infanrix/Pediarix vaccines in the United States and international markets.
The company expects Vaccine sales growth to be broadly stable to a low single-digit decline in 2026.
Profit Discussion
Adjusted operating profit rose 10% at CER to around £2.65 billion.
Core selling, general and administration costs declined 2% to £1.98 billion due to positive legal settlements.
Core research and development expenses rose 12% to £1.49 billion due to continued investment in pipeline advancement.
2026 Guidance
GSK reiterated its guidance for 2026. It expects sales to increase 3-5% during the year.
GSK expects both core operating profit and core EPS to grow in the range of 7-9%. Operating profit growth will be heavily weighted toward the second half of 2026.
R&D is expected to increase at a rate slightly higher than sales growth, while SG&A is expected to grow at a low single-digit percentage. The adjusted tax rate is expected to be around 17.5%.
GSK expects gross margin to continue to benefit from supply chain efficiencies and favorable product mix from Specialty Medicines growth in 2026.
Royalty income is expected to be in the range of £800-850 million.
Currency is expected to hurt sales growth by 2% and operating profit by 4%.
GSK reiterated its outlook for 2031, expecting to generate sales of more than £40 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in fresh estimates.
VGM Scores
Currently, Glaxo has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Glaxo has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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