GSK Earnings: Strong Growth and Steady Pipeline Advancements Support Undervalued Stock

GSK reported strong first-quarter results, but we don’t expect any major changes to its fair value estimate as the outperformance was largely driven by one-time events and inventory patterns that should reverse. We believe the market is underappreciating the steady core sales growth that was shown in the quarter, which we expect to continue for several years. We also feel the market is overly concerned by the Zantac litigation, which we expect will be settled for close to $1 billion.