Nucor earnings beat by $0.08, revenue fell short of estimates
On Wednesday, Morgan Stanley (NYSE:MS) initiated coverage on shares of GlaxoSmithKline (NYSE:GSK:LN) (NYSE: GSK), a $72.5 billion pharmaceutical giant with a 25-year track record of consistent dividend payments, assigning an underweight rating and setting a price target of GBP14.50. According to InvestingPro data, the company currently trades below its Fair Value, suggesting potential upside opportunity despite the rating. The investment firm expressed concerns over headwinds from the Inflation Reduction Act (IRA) and ongoing disruptions in the vaccine market, which are expected to contribute to a deceleration in year-over-year growth.
Stifel analysts predict a modest increase in sales and earnings per share (EPS) for GlaxoSmithKline, with an estimated 4% growth in sales and a 7% rise in EPS. However, they caution that uncertainties in the US and China vaccines market could undermine the positive impact of new product launches in other areas of the company’s portfolio.
The firm’s cautious stance extends to GlaxoSmithKline’s pipeline, particularly in the HIV sector and other areas, leading to long-term sales forecasts that fall short of the company’s own guidance. Morgan Stanley’s projections indicate fiscal year 2031 sales of approximately £35 billion, with an approximate 3% decline in EPS from 2027 to 2030.
The analysis acknowledges that the current negative sentiment surrounding GlaxoSmithKline could suggest a favorable risk-reward balance for investors. However, they also note that the path to resolving these issues remains uncertain, indicating a lack of clarity on how the company will overcome these challenges.
In other recent news, GlaxoSmithKline (GSK) has seen a series of significant developments. The firm’s Q4 revenue outpaced analyst estimates, reporting £8.12 billion, primarily driven by growth in the Specialty Medicines segment. However, the earnings per share fell short, coming in at £0.23. CFRA analyst Wan Nurhayati has reduced the price target for GSK shares to $40.00 from $42.00, maintaining a Hold rating due to concerns about the Vaccines segment performance.
Looking forward, GSK anticipates a 3%-5% increase in sales and a 6%-8% rise in core operating profit for 2025, largely attributed to the higher-margin Specialty Medicines segment. The company also plans to implement a £2 billion share buyback program over the next 18 months. Despite these positive projections, CFRA remains cautious due to weaker sales in the Vaccines segment, which includes key products like Shingrix and Arexvy.
These recent developments underscore the evolving financial landscape for GlaxoSmithKline, with a focus on both the achievements and challenges the company faces.
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