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The company will soon demerge its consumer healthcare arm, Haleon
Thursday 05 May 2022 Author: Martin Gamble

GlaxoSmithKline (GSK) £17.96

Gain to date: 36%

Original entry point: Buy at £13.21 on 5 November 2020

Investor sentiment towards GlaxoSmithKline (GSK) has continued to improve based upon a combination of self-help and agitation from activist investor Elliott Advisors.

Meanwhile a more challenging economic backdrop makes the defensive qualities of healthcare more attractive and so the shares have been in demand.

GlaxoSmithKline made a strong start to the 2022 financial year with first quarter revenue growing 34% while earnings per share was 43% ahead at 32.8p.

Its consumer healthcare division Haleon will be demerged from the group in July and floated on the UK stock market. 

Over the medium term, Haleon is targeting organic sales growth of between 4% and 6% and a sustainable moderate expansion of operating margin from the 22.8% achieved in 2021.

Following the demerger GlaxoSmithKline will become a focused biopharmaceutical and vaccines business. It will soon change its name to GSK.

It hopes to deliver more than 5% annualised revenue growth and more than 10% annualised growth in adjusted operating profit over the next five years.

SHARES SAYS: We remain positive on GlaxoSmithKline.

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