Over the last year, the GSK share price (LON: GSK) (GSK.L) has fallen by around 25%. That’s a significantly worse performance than the FTSE 100 index (INDEXFTSE: UKX) over the same time period. It is currently down by around 2%, which means that GSK has underperformed the index to which it belongs by around 23%.
Investment metrics of the GSK share price
The fall in GSK’s share price over the past year means that it now has a forward price-earnings ratio of around 12. This uses analyst forecasts for earnings per share in the current financial year of 100.4p on a consensus basis.
Looking ahead to next year, analysts expect the company to deliver a 10% rise in profit so that its earnings per share is around 115p. Using that figure in the calculation of the company’s forward price-earnings ratio means that it falls to approximately 10.5.
In terms of the firm’s income investing prospects, it has a dividend yield of around 6.6% using the current year’s analyst dividend forecasts. This is higher than the FTSE 100 index’s dividend yield as at the end of January of 3.7%. The company’s dividend yield has moved higher partly because of its share price fall over recent months.
The company announced in its most recent quarterly trading update that it may need to reduce dividend payments versus current levels on an aggregated basis after its planned split into two companies in 2022. As a result, analysts forecast a 79.5p per share dividend in the current year and a 64.1p dividend per share in 2022. Using the latter figure, the GSK share price currently has a forward dividend yield of around 5.3%.
Latest investor updates
The company’s latest trading update was released in early February. It showed a continuation of the recent mixed performance from GSK’s three business segments. Indeed, its pharmaceuticals and vaccines divisions reported 1% declines apiece in constant currency revenue. However, its consumer healthcare segment posted a 14% rise in constant currency revenue due in part to rising demand among consumers during the Covid-19 pandemic.
The company reported that it is making encouraging progress on its Biopharma product pipeline. It now has 20 assets in late-stage clinical trials and expects there to be 20+ product launches within the next five years. Around half of those releases are expected to result in peak annual revenues that are in excess of $1 billion, according to the company. It also announced that it met its 2020 targets with regard to cost savings. It delivered $0.3 billion in cost reductions for the year.
Looking ahead, the firm is slated to announce its full year results on 28 April 2021. Investors are likely to watch them closely after the GSK share price’s underperformance of the FTSE 100 index over the past year.
Not Investment Advice
Note: Views expressed are those of the writer. The author does not own any stocks mentioned. The article is information, not advice. Share prices can rise and fall. Past returns are not a guide to the future. Please do your own research.