GlaxoSmithKline (GSK) results are an easy pill to swallow

Strong sales from key drugs, combined with ongoing clinical trials could spell further positives down the line.

Article updated: 24 July 2019 2:00pm Author: Ian Forrest

  • Full-year earnings guidance is lifted as strong sales and earnings per share are delivered.
  • Pharmaceutical sale gains offset the lower than expected sales yielded by the group’s Advair asthma treatment.
  • With the dividend yield at a decent 4.8% and commitments to hold it level, we continue our ‘Buy’ recommendation for low risk investors.

Glaxo delivered some good second quarter figures today with sales of £7.8bn and adjusted earnings per share of 30.5p comfortably beating expectations. The company raised its full-year guidance and now expects earnings per share to fall by 3-5% this year rather than the 5-9% previously forecast thanks to a number of factors including an improved operating performance. Sales of key drug Shingrix were better than expected at £386m, although those of Advair, which is facing generic competition in the US, were slightly below forecast at £412m. The CEO said she was expecting further positive data from clinical trials in the second half and confirmed that overall dividends would remain at 80p for the year.

These are good results from Glaxo and it was no surprise to see the shares responding positively to the improved prospects for the second half. Advair is clearly facing an uphill battle in the US but the positive news on the pipeline of new drugs is reassuring for investors, as is the commitment to hold the dividend.

Our View on GlaxoSmithKline - Buy

The shares have outperformed the market over the past year and still offer a decent 4.8% prospective yield. As a result, we continue with our ‘Buy’ recommendation for investors seeking income and willing to accept a lower level of risk.

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All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to To understand how our Investment research team arrive at their views please read our Investment Research Policy.

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Ian Forrest

Investment Research Analyst

Ian’s background in investments, financial journalism and research has seen him advising private investors on equities and helping to manage portfolios. His qualifications include the Certificate in Financial Planning and the Chartered Institute for Securities & Investment’s Investment Advice Diploma.