GlaxoSmithKline shares under the microscope ahead of investor update
The next GlaxoSmithKline investor update is scheduled for Wednesday 23 June. This eagerly anticipated update is expected to reveal chief executive Emma Walmsley’s plan to build a war chest for sustained growth for shareholders.
- GlaxoSmithKline shares up 4.94% in the last month
- £5bn war chest planned to invest
- Update billed as ‘biggest corporate change’ for GSK in 20 years
- Ready to trade the GlaxoSmithKline share price? Open an account today
How have GlaxoSmithKline shares fared so far this year?
In the year to date, the GlaxoSmithKline share price has risen 3.47% as of 10am 21 June. It endured a turbulent start to 2021, with shares plunging from £13.76 to £11.91 by the end of February, as the third nationwide lockdown took hold.
The uncertainty in GlaxoSmithKline shares has also been caused by the prospect of a demerger, with GSK planning to split its company in half, creating a ‘consumer healthcare’ division as of 2022. First proposed in 2018, the decision comes after recent investors Elliott Management stated it would not encourage a sell-off of its vaccine and pharma departments.
The bull run on GSK shares since March, rising from £12.01 on 1 March to highs of £14.36 on 16 June, is a result of bullish noises coming from GSK’s upper echelons – most notably its chief executive Emma Walmsley.
GlaxoSmithKline shares have failed to outperform the FTSE 100 index based on the last five-year and ten-year charts. However, Walmsley has a plan to turbocharge the company, including a pipeline of new drugs and treatments.
What can we expect from the investor update on 23 June?
Shareholders will be waiting eagerly for the GSK investor update on 23 June, which has been described as an opportunity to ‘outline strategy, growth outlooks (2022-2031)’ as well as ‘capital allocation priorities and timing and approach to separation’.
At the forefront of its growth strategy is a move to slash shareholder dividends further to create a £5bn pot to invest and ‘firepower’ the sluggish GSK share price.
Early reports suggest it will be described as the ‘biggest corporate change for GSK’ in two decades. Additionally, Walmsley promised a ‘step change in growth and returns for shareholders’, by using this war chest to accelerate GSK’s drug pipeline. It also plans to pay down debts, extend patents on multiple products, and have the flexibility to make ambitious acquisitions.
What is GSK planning to invest in over the short-to-medium term?
In a recent letter distributed to GSK employees, Walmsley insists the company’s strategy remains to ‘focus on the science of the immune system’, as well as ‘human genetics and advanced technologies’, designed to tackle ‘infectious diseases, HIV, cancer and immune-mediated and respiratory diseases’.
Increased collaboration is underway between GSK’s pharma and vaccine divisions such as Vir Biotechnology. The aim is to develop new preventative treatments for infectious diseases like flu, which many fears are likely to return this winter as Covid-19 hospitalisations and deaths ease.
Go long or short with the GlaxoSmithKline share price today
Take your position on UK shares for just a small initial deposit with CFDs.
Open an account to start trading or investing in UK shares.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.