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GlaxoSmithKline (LON:GSK) share price: what to expect from its Q1 results

The pharmaceutical company recorded a strong 2018, with the company wasting no time in driving growth this year with investors eager for an update on its acquisition of Tesaro and its consumer health joint venture with Pfizer.

When is GlaxoSmithKline’s results date?

GlaxoSmithKline (GSK) will release its Q1 trading update on May 1.

GlaxoSmithKline results preview: what does the city expect?

At the end of what was a very successful 2018, GSK announced it would form a new world-leading consumer healthcare joint venture (JV) with rival Pfizer in a move that will see its combined businesses generate sales of around £9.8 billion.

Under the terms of the deal, GSK controls a 68% majority stake in the JV, with the transaction representing a major opportunity for the pharmaceutical company to build on its recent buyout of Novartis that will help it deliver significant shareholder value.

Investors will welcome an update on the JV, which brings together two highly complementary portfolios of consumer health brands, including GSK’s Sensodyne, Voltaren, and Panadol, alongside Pfizer’s Advil, Centrum and Caltrate.

The deal will also see the newly formed business become a global leader I over-the-counter products with a market share of 7.3% ahead of its nearest rival and allow it to grab the number one or two position in all major geographies, including the US and China. Overall the Joint Venture will target an Adjusted operating margin percentage in the ‘mid-to-high 20’s’ by 2022.

Investors will have their eye on what GSK intends to pay in dividends to shareholders for 2019, with the JV allowing them to confirm an 80p a share payout, which its management intends to maintain.

In January, GSK completed its acquisition of oncology focused biopharmaceutical company Tesaro in a deal valued at £4 billion that will strengthen its pharmaceutical business, accelerating the build of GSK’s pipeline and commercial capability in oncology.

‘The acquisition of Tesaro, which we have completed today, significantly strengthens our oncology pipeline and brings new scientific capabilities and expertise that will increase the pace and scale at which we can help patients living with cancer,’ GSK Chief Scientific Officer and President Dr Hal Barron said.

Overall, investors are expecting another strong year from GSK, with analysts arguing that the stock is undervalued. Zacks Equity Research gave the stock a ‘Buy’ rating, pointing to the fact that GSK is trading with price/earnings (P/E) ratio of 13.51, compared to an industry average of 14.37. Over the past 52 weeks, GSK’s forward P/E has hit as high as 14.65 and as low as 12.29, with a median of 13.59.

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