Analyst Note| Damien Conover, CFA |
In tandem with consumer health divestment details, Glaxo laid out solid long-term guidance for the remaining drug and vaccine business that looks attainable and should help reassure investors of the firm’s steady growth potential. We are not making any major changes to our fair value estimate, as the guidance is similar to our projections over the next five years. However, Glaxo also provided 2031 sales guidance (past the major patent loss of Tivicay in 2028-29) of over GBP 33 billion that is almost 10% higher than our expectations. If Glaxo can reach this estimate, we believe there is upside to our valuation. Nevertheless, we already view the stock as undervalued, with the market not fully appreciating the firm’s entrenched vaccine platform and emerging pipeline that also support a wide moat.