Source: Sharecast
Berenberg GSK shares had delivered "a strong performance year-to-date", boosted further following "strong Q4 figures" and FY24 guidance that came in ahead of expectations.
"This is warranted, in our view," said Berenberg. "We update our forecasts to reflect higher sales growth primarily from vaccines (Arexvy launch ramp strength) and HIV (long-acting sales growth ahead). GSK's continued commitment to earnings growth ahead of sales this year, despite a significant tax rate increase, is supportive of the ongoing margin expansion thesis."
GSK also raised its mid-term sales and operating profit growth guidance and increased its 2031 sales target to more than £38.0bn, with management now expecting to hit its previous 2031 target, of more than £33.0bn, five years earlier.
"These upgrades reflect a strong underlying business, internal pipeline progress and incremental business development," said Berenberg.
The German bank added that GSK had also looked to "allay investor fears on HIV", confirming that settlements have been secured with all generic companies that have filed for approval of dolutegravir-based drugs, resulting in a 2-3-year extension of its forecast Dovato/Juluca lifecycles, and that a commitment to "broadly stable" operating margins through the 2028-2030 patent expiry period.
Reporting by Iain Gilbert at Sharecast.com
