LSE:GSK

Stock Analysis Report

Executive Summary

GlaxoSmithKline plc engages in the creation, discovery, development, manufacture, and marketing of pharmaceutical products, vaccines, over-the-counter medicines, and health-related consumer products in the United Kingdom, the United States, and internationally.

Snowflake

Fundamentals

Established dividend payer with proven track record.


Similar Companies

Share Price & News

How has GlaxoSmithKline's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-1.8%

GSK

-1.2%

GB Pharmaceuticals

1.1%

GB Market


1 Year Return

15.1%

GSK

20.5%

GB Pharmaceuticals

2.7%

GB Market

Return vs Industry: GSK underperformed the UK Pharmaceuticals industry which returned 20.5% over the past year.

Return vs Market: GSK exceeded the UK Market which returned 2.7% over the past year.


Shareholder returns

GSKIndustryMarket
7 Day-1.8%-1.2%1.1%
30 Day2.7%0.9%-1.7%
90 Day1.2%7.3%-2.7%
1 Year21.1%15.1%24.2%20.5%7.8%2.7%
3 Year18.4%1.2%46.9%32.5%19.3%4.7%
5 Year66.7%25.8%94.7%62.7%38.0%8.1%

Price Volatility Vs. Market

How volatile is GlaxoSmithKline's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is GlaxoSmithKline undervalued compared to its fair value and its price relative to the market?

29.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: GSK (£16.84) is trading below our estimate of fair value (£23.78)

Significantly Undervalued: GSK is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: GSK is good value based on its PE Ratio (18.8x) compared to the Pharmaceuticals industry average (20.9x).

PE vs Market: GSK is poor value based on its PE Ratio (18.8x) compared to the UK market (16.4x).


Price to Earnings Growth Ratio

Low PEG Ratio: GSK is poor value based on its PEG Ratio (2.3x)


Price to Book Ratio

PB vs Industry: GSK is overvalued based on its PB Ratio (23.1x) compared to the GB Pharmaceuticals industry average (2.2x).


Next Steps

Future Growth

How is GlaxoSmithKline forecast to perform in the next 1 to 3 years based on estimates from 22 analysts?

8.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GSK's forecast earnings growth (8.2% per year) is above the savings rate (1.2%).

Earnings vs Market: GSK's earnings (8.2% per year) are forecast to grow slower than the UK market (12.3% per year).

High Growth Earnings: GSK's earnings are forecast to grow, but not significantly.

Revenue vs Market: GSK's revenue (4.6% per year) is forecast to grow faster than the UK market (3.8% per year).

High Growth Revenue: GSK's revenue (4.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: GSK's Return on Equity is forecast to be very high in 3 years time (94.8%).


Next Steps

Past Performance

How has GlaxoSmithKline performed over the past 5 years?

-24.0%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: GSK's earnings have declined by -24% per year over the past 5 years.

Accelerating Growth: GSK's earnings growth over the past year (167.3%) exceeds its 5-year average (-24% per year).

Earnings vs Industry: GSK earnings growth over the past year (167.3%) exceeded the Pharmaceuticals industry 24.2%.


Return on Equity

High ROE: Whilst GSK's Return on Equity (163.36%) is outstanding, this metric is skewed due to their high level of debt.


Return on Assets

ROA vs Industry: GSK has a higher Return on Assets than the Pharmaceuticals industry average last year.


Return on Capital Employed

ROCE Improving: GSK has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is GlaxoSmithKline's financial position?


Financial Position Analysis

Short Term Liabilities: GSK's short term assets (£18.2B) do not cover its short term liabilities (£25.8B)

Long Term Liabilities: GSK's short term assets (18.2B) do not cover its long term liabilities (34.9B)


Debt to Equity History and Analysis

Debt Level: GSK's debt to equity ratio (1125.4%) is considered high

Reducing Debt: GSK's debt to equity ratio has increased from 257.7% to 1125.4% over the past 5 years.

Debt Coverage: GSK's debt is well covered by operating cash flow (24.7%).

Interest Coverage: GSK's interest payments on its debt are well covered by EBIT (10.2x coverage).


Balance Sheet

Inventory Level: GSK has a high level of physical assets or inventory.

Debt Coverage by Assets: GSK's debt is not covered by short term assets (assets are 0.5x debt).


Next Steps

Dividend

What is GlaxoSmithKline's current dividend yield, its reliability and sustainability?

4.75%

Current Dividend Yield


Dividend Yield vs Market

company4.8%marketbottom25%2.0%markettop25%5.4%industryaverage3.0%forecastin3Years4.8%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: GSK's dividend (4.75%) is higher than the bottom 25% of dividend payers in the UK market (2.01%).

High Dividend: GSK's dividend (4.75%) is low compared to the top 25% of dividend payers in the UK market (5.44%).

Stable Dividend: GSK's dividends per share have been stable in the past 10 years.

Growing Dividend: GSK's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (89.1%), GSK's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: GSK's dividends in 3 years are forecast to be covered by earnings (62.2% payout ratio).


Next Steps

Management

What is the CEO of GlaxoSmithKline's salary, the management and board of directors tenure and is there insider trading?

1.8yrs

Average management tenure


CEO

Emma Walmsley (49yo)

2.5yrs

Tenure

UK£5,887,000

Compensation

Ms. Emma N. Walmsley serves as Chief Executive Officer of GlaxoSmithKline Plc since March 31, 2017. Ms. Walmsley served as the Chief Executive Officer of Consumer Healthcare at GlaxoSmithKline Plc since Ma ...


CEO Compensation Analysis

Compensation vs. Market: Emma's total compensation ($USD7.47M) is about average for companies of similar size in the UK market ($USD4.54M).

Compensation vs Earnings: Emma's compensation has increased by more than 20% in the past year.


Management Age and Tenure

1.8yrs

Average Tenure

56yo

Average Age

Experienced Management: GSK's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Age and Tenure

3.3yrs

Average Tenure

60yo

Average Age

Experienced Board: GSK's board of directors are considered experienced (3.3 years average tenure).


Insider Trading

Insider Buying: GSK insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUK£9,06224 Jul 19
Manvinder Banga
EntityIndividual
Role
Lead Director
Senior Independent Non-Executive Director
Shares547.91
Max PriceUK£16.54
BuyUK£7,18824 Jul 19
Vivienne Cox
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares434.55
Max PriceUK£16.54
BuyUK£43,75024 Jul 19
Philip Hampton
EntityIndividual
Shares2,645.1
Max PriceUK£16.54
BuyUK£9,06224 Jul 19
Urs Rohner
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares547.91
Max PriceUK£16.54
SellUK£558,62618 Feb 19
Claire Thomas
EntityIndividual
Shares35,253
Max PriceUK£15.85
SellUK£1,048,36918 Feb 19
Emma Walmsley
EntityIndividual
Role
Chief Executive Officer
CEO & Director
Shares66,159
Max PriceUK£15.85
SellUK£321,40818 Feb 19
Philip Thomson
EntityIndividual
Shares20,283
Max PriceUK£15.85
BuyUK£43,75002 Nov 18
Philip Hampton
EntityIndividual
Shares2,866.97
Max PriceUK£15.26
BuyUK£7,18802 Nov 18
Manvinder Banga
EntityIndividual
Role
Lead Director
Senior Independent Non-Executive Director
Shares471
Max PriceUK£15.26
BuyUK£5,31202 Nov 18
Vivienne Cox
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares348.13
Max PriceUK£15.26
BuyUK£7,18802 Nov 18
Urs Rohner
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares471
Max PriceUK£15.26

Ownership Breakdown


Management Team

  • Hal Barron (56yo)

    Chief Scientific Officer

    • Tenure: 1.8yrs
    • Compensation: UK£6.56m
  • Karenann Terrell (58yo)

    Chief Digital & Technology Officer

    • Tenure: 2.1yrs
  • Diana Conrad

    Senior Vice President of Human Resources

    • Tenure: 0.5yrs
  • Iain Mackay (57yo)

    CFO & Executive Director

    • Tenure: 0.8yrs
  • David Redfern (53yo)

    Chief Strategy Officer

    • Tenure: 11.4yrs
  • Sarah Elton-Farr

    Head of Investor Relations

    • Tenure: 0yrs
  • Emma Walmsley (49yo)

    CEO & Director

    • Tenure: 2.5yrs
    • Compensation: UK£5.89m
  • Nick Hirons

    Senior Vice President of Global Ethics & Compliance

    • Tenure: 5.1yrs
  • James Ford

    Senior VP & General Counsel

    • Tenure: 1.2yrs
  • Sally Jackson

    Senior Vice President of Global Communications & CEO Office

    • Tenure: 0.6yrs

Board Members

  • Judy Lewent (70yo)

    Independent Non-Executive Director

    • Tenure: 8.5yrs
    • Compensation: UK£437.00k
  • Jon Symonds (60yo)

    Non-Executive Chairman

    • Tenure: 0.08yrs
  • Urs Rohner (60yo)

    Independent Non-Executive Director

    • Tenure: 4.8yrs
    • Compensation: UK£138.00k
  • Hal Barron (56yo)

    Chief Scientific Officer

    • Tenure: 1.8yrs
    • Compensation: UK£6.56m
  • Vivienne Cox (60yo)

    Independent Non-Executive Director

    • Tenure: 3.3yrs
    • Compensation: UK£96.00k
  • Vindi Banga (65yo)

    Senior Independent Non-Executive Director

    • Tenure: 3.4yrs
    • Compensation: UK£118.00k
  • Lynn Elsenhans (62yo)

    Independent Non-Executive Director

    • Tenure: 7.3yrs
    • Compensation: UK£321.00k
  • Iain Mackay (57yo)

    CFO & Executive Director

    • Tenure: 0.8yrs
  • Emma Walmsley (49yo)

    CEO & Director

    • Tenure: 2.5yrs
    • Compensation: UK£5.89m
  • Jesse Goodman (67yo)

    Independent Non-Executive Director

    • Tenure: 3.8yrs
    • Compensation: UK£392.00k

Company Information

GlaxoSmithKline plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: GlaxoSmithKline plc
  • Ticker: GSK
  • Exchange: LSE
  • Founded: 1715
  • Industry: Pharmaceuticals
  • Sector: Pharmaceuticals & Biotech
  • Market Cap: UK£83.346b
  • Shares outstanding: 4.95b
  • Website: https://www.gsk.com

Number of Employees


Location

  • GlaxoSmithKline plc
  • 980 Great West Road
  • Brentford
  • Middlesex
  • TW8 9GS
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
GLAX.FOTCPK (Pink Sheets LLC)YesCommon StockUSUSDJan 1975
GS7DB (Deutsche Boerse AG)YesCommon StockDEEURJan 1975
GSKLSE (London Stock Exchange)YesCommon StockGBGBPJan 1975
GS7XTRA (XETRA Trading Platform)YesCommon StockDEEURJan 1975
GSKLBATS-CHIXE (BATS 'Chi-X Europe')YesCommon StockGBGBPJan 1975
GSKSWX (SIX Swiss Exchange)YesCommon StockCHCHFJan 1975
GSKNYSE (New York Stock Exchange)ADR EACH CNV INTO 2 ORD GBP0.25USUSDDec 1993
GSK NBMV (Bolsa Mexicana de Valores)ADR EACH CNV INTO 2 ORD GBP0.25MXMXNDec 1993
GS7ADB (Deutsche Boerse AG)ADR EACH CNV INTO 2 ORD GBP0.25DEEURDec 1993
GSKBASE (Buenos Aires Stock Exchange)CEDEAR EACH REPR 1/4 ADRARARSSep 2000

Biography

GlaxoSmithKline plc engages in the creation, discovery, development, manufacture, and marketing of pharmaceutical products, vaccines, over-the-counter medicines, and health-related consumer products in the ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/14 20:38
End of Day Share Price2019/10/14 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.