We’ve recently updated our valuation analysis.

GSK Valuation

Is GSK undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for GSK?

Other financial metrics that can be useful for relative valuation.

GSK key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue2.4x
Enterprise Value/EBITDA7.6x
PEG Ratio1.1x

Price to Earnings Ratio vs Peers

How does GSK's PE Ratio compare to its peers?

The above table shows the PE ratio for GSK vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average18.1x
NOVN Novartis
26.2x13.4%CHF168.6b
MRK Merck
18x11.0%US$261.0b
SAN Sanofi
16.6x12.0%€106.2b
BAYN Bayer
11.8x8.4%€55.7b
GSK GSK
13x11.6%UK£58.1b

Price-To-Earnings vs Peers: GSK is good value based on its Price-To-Earnings Ratio (13x) compared to the peer average (18.1x).


Price to Earnings Ratio vs Industry

How does GSK's PE Ratio compare vs other companies in the European Pharmaceuticals Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a20.9%
n/an/an/a

Price-To-Earnings vs Industry: GSK is good value based on its Price-To-Earnings Ratio (13x) compared to the European Pharmaceuticals industry average (20.2x)


Price to Earnings Ratio vs Fair Ratio

What is GSK's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

GSK PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio13x
Fair PE Ratio45.5x

Price-To-Earnings vs Fair Ratio: GSK is good value based on its Price-To-Earnings Ratio (13x) compared to the estimated Fair Price-To-Earnings Ratio (45.5x).


Share Price vs Fair Value

What is the Fair Price of GSK when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: GSK (£14.4) is trading below our estimate of fair value (£31.75)

Significantly Below Fair Value: GSK is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst GSK forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£14.40
UK£16.98
+17.9%
21.6%UK£25.70UK£11.10n/a20
Jan ’24UK£14.38
UK£17.03
+18.4%
21.1%UK£25.70UK£11.10n/a20
Dec ’23UK£14.15
UK£17.10
+20.8%
20.9%UK£25.70UK£11.10n/a20
Nov ’23UK£14.46
UK£18.01
+24.6%
19.5%UK£25.70UK£11.21n/a21
Oct ’23UK£13.06
UK£18.61
+42.5%
19.4%UK£25.70UK£11.21n/a22
Sep ’23UK£13.57
UK£19.85
+46.2%
18.5%UK£28.59UK£11.21n/a21
Aug ’23UK£16.94
UK£21.06
+24.3%
15.3%UK£28.59UK£16.30n/a20
Jul ’23UK£22.32
UK£23.36
+4.7%
11.4%UK£28.63UK£17.50n/a20
Jun ’23UK£21.35
UK£23.44
+9.8%
11.5%UK£28.63UK£17.50n/a19
May ’23UK£22.46
UK£22.94
+2.1%
10.9%UK£28.63UK£17.50n/a21
Apr ’23UK£20.71
UK£22.26
+7.5%
11.2%UK£28.63UK£17.50n/a21
Mar ’23UK£19.31
UK£22.05
+14.2%
11.7%UK£28.63UK£17.50n/a21
Feb ’23UK£20.55
UK£22.18
+7.9%
12.0%UK£28.63UK£17.50UK£14.2021
Jan ’23UK£20.08
UK£21.17
+5.4%
12.6%UK£27.50UK£16.88UK£14.3825
Dec ’22UK£19.27
UK£20.94
+8.7%
12.3%UK£27.50UK£16.88UK£14.1525
Nov ’22UK£19.31
UK£20.25
+4.9%
11.7%UK£25.94UK£16.88UK£14.4624
Oct ’22UK£17.32
UK£20.06
+15.8%
11.8%UK£25.94UK£16.88UK£13.0624
Sep ’22UK£18.39
UK£20.00
+8.7%
10.5%UK£24.06UK£16.88UK£13.5724
Aug ’22UK£17.72
UK£19.44
+9.7%
13.5%UK£24.06UK£13.38UK£16.9424
Jul ’22UK£17.98
UK£19.07
+6.1%
14.5%UK£24.06UK£13.38UK£22.3223
Jun ’22UK£16.72
UK£18.85
+12.7%
16.2%UK£24.38UK£13.38UK£21.3523
May ’22UK£16.75
UK£19.05
+13.8%
17.1%UK£25.63UK£13.38UK£22.4624
Apr ’22UK£15.97
UK£19.02
+19.1%
17.9%UK£25.63UK£12.05UK£20.7124
Mar ’22UK£15.01
UK£19.15
+27.6%
18.2%UK£26.25UK£12.05UK£19.3124
Feb ’22UK£16.96
UK£21.01
+23.9%
16.8%UK£29.38UK£13.82UK£20.5524

Analyst Forecast: Target price is less than 20% higher than the current share price.


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