Earnings Analysis October 30, 2026

GSK Plc ADR ($GSK) Q3 2026 Earnings Analysis: Revenue and EPS Beat Expectations, Shares Fall 4.3% on Weak Vaccine Sales

Earnings Report

Revenue: £8.887 billion (+4% YoY, +5% at constant FX, vs. $8.805 billion expected) ✅ Beat

EPS (Earnings Per Share): $1.45 (+9.5% vs. $1.33 expected) ✅ Beat

Guidance: Maintained · 2026 revenue 3-5% (upper end of range), adjusted operating profit 7-9% (upper end of range), adjusted EPS 7-9% (lower end of range)

Stock Reaction: -4.3% (based on BMO closing price for the day)

Highlights

15% Growth in Specialty Medicines: HIV grew 10%, respiratory/immunology 21%, and oncology 23%, showing balanced growth.

Record Meningitis Vaccine Sales: Reached a quarterly high of £599 million.

67% Increase in Free Cash Flow: Generated £2.078 billion in cash.

This was a quarter where the revenue focus shifted from vaccines to specialty medicines. In HIV, long-acting injectables accounted for 80% of total HIV growth, and in oncology, Jemperli and Olaparib continued their double-digit growth. Due to improved product mix, the adjusted operating margin held at 34.6%.

Lowlights

2% Decrease in Vaccine Revenue: Shingrix fell 5% and Arexvy fell 24%.

16% Decrease in GAAP Operating Profit: Restructuring costs of £328 million weighed on profits.

1% Increase in Adjusted EPS: Profit growth was marginal compared to the 5% increase in revenue.

Headwinds in the vaccine business are evident. Shingrix faced declining sales in China, while Arexvy dealt with slowing market demand and the effect of last year's US return reserve adjustments. As restructuring costs are expected to be concentrated in 2026-2027, GAAP profits will remain under pressure for the time being.

What the Company Said

CEO Miels emphasized that the company received three specialty medicine approvals in the US and is set to initiate 22 Phase 3 clinical trials within the year. While maintaining its annual outlook, the company positioned revenue growth at the upper end of the range and adjusted EPS growth at the lower end, noting that R&D expenses will grow faster than revenue.

Market Reaction and Future Outlook

Despite both revenue and profit exceeding expectations, the stock price fell 4.3% on the day of the announcement. The market placed more weight on sluggish vaccine sales and pipeline credibility than on these figures.

A key point will be whether Shingrix sales in China recover next quarter and the trend of the 46% vaccination rate in the US.

The commencement of the four remaining Phase 3 clinical trials this year and the OCEAN clinical trial results for Exdensur will determine pipeline credibility.

Ahead of 2028, when the Dolutegravir patent expiration begins, it is necessary to monitor the progress of the approval for Cabotegravir's three-times-yearly preventive therapy.

Earnings Call Summary

Once the earnings call concludes and the company script is released, the key takeaways from the call will be added here. We will select and summarize only the most important points, such as how management explained performance and outlook, and what analysts asked.