GSK plc
🇬🇧 GSK.LSE · London · GB00BN7SWP63
Healthcare
GBX 2144.00 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
15.4
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 2144.00 ÷ 138.84 = 15.4
TTM period through: 2025-12-31
Forward P/E (estimated): 10.9
Based on analyst estimates
Reference: Provider P/E (Trailing): 15.4
Yield (Fwd)
3.36%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 3.13%
Net Debt/EBITDA (TTM)
1.2x
Latest quarter: 6.5x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): 6.5x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
51.9%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 44.9%
Cash Flow Payout (TTM): 35.1%
FCF Coverage (TTM): 2.32x
ROE
43.3%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
9.6x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
GSK is a leading global biopharmaceutical company with highly defensive cash flows and a robust healthcare portfolio. The recent headline net loss, driven entirely by a one-time Zantac litigation settlement, presents a classic temporary problem that masks strong underlying core profit growth. Trading at 2144 GBX vs our fair value estimate of 2082-2499 GBX (factoring in its competitive moat), this represents an attractive entry point for dividend investors seeking essential healthcare exposure. Worth considering for new positions at current levels given the secure 3.1% yield and excellent free cash flow coverage.
Sector Context
GSK is a leading global biopharmaceutical company that discovers, develops, and manufactures vaccines and specialty medicines. In the healthcare sector, companies often face complex challenges like patent expirations and litigation risks, but their essential life-saving products provide highly defensive, non-cyclical cash flows that are particularly attractive for long-term dividend investing.
Temporary Opportunity Identified
GSK reported a net loss of £58 million in Q3 2024 entirely driven by a substantial one-time £1.8 billion charge to settle the majority of U.S. Zantac litigation cases. The underlying business remains highly profitable.
📊 Strategy Analysis
- • Core profitability remains robust despite headline net loss, with core operating profit and EPS growing by 5% when excluding the one-time £1.8B Zantac litigation settlement.
- • Excellent dividend sustainability with a cash flow payout ratio of just 35.1% and Free Cash Flow covering the dividend 2.3x.
- • Strong balance sheet evolution, having deleveraged significantly over the last decade with Net Debt/EBITDA falling from 3.2x to a very safe 1.2x.
- • Trading at an attractive forward P/E of 10.9x compared to the artificially elevated TTM P/E of 15.4x, suggesting the litigation impact is temporarily masking true earning power.
⚠ What to Watch
- • Vaccine sales recently declined 15% due to changing immunization guidelines and lower COVID vaccination prioritization.
- • While historical dividend cuts (2022, 2023) were prudent strategic resets tied to the Haleon demerger, they disrupt the long-term dividend growth consistency.
- • Ongoing exposure to typical pharmaceutical sector risks, including patent cliffs and future litigation.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-04
Disclaimer: This information is for educational purposes only. Not financial advice.