Undervalued GSK Posts Strong Q2 Aided by New Product Gains and a Favorable Year-Over-Year Comparison

GSK reported strong second-quarter results ahead of our expectations, but we don’t expect any major changes to our fair value estimate based on the minor outperformance. We continue to view the stock as undervalued with the market not fully appreciating GSK’s growth potential and pipeline advancements that support the firm’s wide moat. Additionally, with GSK’s divestment of consumer healthcare products (Haleon) completed, GSK is now focused on branded prescription drugs and vaccines that look poised for faster growth over the next five years than the consumer product segment.