GSK Q1 earnings preview: specialty medicines growth and strategic initiatives under the spotlight

GSK's Q1 2025 earnings expectations

GlaxoSmithKline (GSK) is set to release its first-quarter (Q1) 2025 earnings on Wednesday, 30 April 2025, before the market opens. Analysts anticipate earnings per share (EPS) of 39.68 pence and revenue around £7.42 billion for the quarter.

These projections reflect the ongoing transformation of GSK's business model following the 2022 demerger of its consumer healthcare business, which created Haleon as a separate entity. The leaner GSK is now focused on innovative medicines and vaccines, with particular emphasis on specialty treatments.

The company's performance in Q1 will provide important insights into the success of this strategic shift, with investors looking for continued momentum in key growth areas. GSK has previously guided for 3-5% turnover growth and 6-8% core operating profit growth for the full year 2025.

For those interested in the pharmaceutical sector, GSK represents one of the UK's flagship companies. Investors using trading platforms will be closely monitoring these results for clues about both GSK's trajectory and broader industry trends in the highly competitive pharmaceutical landscape.

Specialty medicines growth trajectory

GSK projects low double-digit percentage growth in turnover for its Specialty Medicines segment at constant exchange rates (CER) for the full year 2025. This growth is expected to be a significant contributor to overall performance and will be a key focus in the Q1 results.

The specialty medicines portfolio includes treatments for HIV, oncology, and immunology - areas where GSK has been investing heavily to build competitive advantages. Of particular interest will be the performance of newer HIV therapies like Dovato and Cabenuva, which represent the company's efforts to transition patients from older regimens.

In oncology, products like Jemperli (dostarlimab) for endometrial cancer and Blenrep for multiple myeloma will be in focus. GSK has high hopes for its oncology pipeline, though competition in this space is fierce and investor expectations remain cautious.

For those considering positions in pharmaceutical stocks, understanding these growth dynamics is essential. Share investing in the sector requires careful analysis of both current performance and pipeline potential, particularly for specialty medicines that face less pricing pressure than primary care treatments.

Regulatory headwinds and policy impact

The company anticipates a revenue headwind of £400–500 million in 2025 due to the Inflation Reduction Act (IRA), with £150–200 million impacting the HIV segment. Investors will be keen to see how GSK navigates these challenges in the Q1 results and whether management provides any updated guidance on this front.

The IRA's provisions allowing Medicare to negotiate drug prices represent a significant shift in the US healthcare landscape. For GSK, this particularly affects its HIV franchise, which generates substantial revenue from the US market. The company's ability to offset these pressures through volume growth and operational efficiencies will be closely scrutinised.

Beyond the IRA, broader regulatory developments in key markets like Europe and emerging economies will influence GSK's growth prospects. Any commentary on the evolving global regulatory environment will be valuable for assessing long-term revenue potential.

For traders using spread betting to take positions on GSK, understanding these regulatory impacts is crucial. Policy changes can significantly affect pharmaceutical stock performance, creating both risks and opportunities for well-informed traders.

Capital allocation and shareholder returns

GSK commenced a £2 billion share buyback program in February 2025, with £272 million spent on repurchasing 18.2 million shares by the end of Q1. This initiative may influence EPS and shareholder value, with investors likely to seek updates on the program's progression in the upcoming results.

The buyback represents a significant shift in capital allocation strategy, reflecting increased confidence in GSK's financial position following the Haleon demerger. It also signals management's belief that the stock is undervalued at current levels - a view that many analysts share.

Dividend policy will also be in focus, with GSK maintaining its commitment to an annual dividend of 60p per share for 2025. The company continues to uphold its progressive dividend policy, which aims for a payout ratio between 40% and 60% of earnings through the investment cycle. This consistent dividend approach reflects GSK's confidence in its financial performance and commitment to delivering shareholder returns. Any indications of future dividend growth potential would be well-received by income-focused investors, who have weathered significant changes in the company's shareholder return profile in recent years.

For those considering CFD trading on pharmaceutical stocks, these capital allocation decisions provide important context. Companies with strong balance sheets and shareholder-friendly policies often demonstrate less volatility during market stress, potentially influencing trading strategies.

Pipeline progress and innovation outlook

Beyond current commercial performance, GSK's Q1 update will likely include significant pipeline developments that could shape future growth. The company has been rebuilding its R&D capabilities under CEO Dame Emma Walmsley, with increasing focus on vaccines and specialty medicines.

Recent clinical trial results and regulatory submissions will be detailed in the earnings release. Particular attention will be paid to GSK's respiratory syncytial virus (RSV) vaccine program, which represents a major commercial opportunity following positive Phase 3 data.

The company's partnerships and licensing deals will also be of interest, as GSK continues to complement internal R&D with external innovation. Any new collaboration announcements or progress updates on existing partnerships could influence market sentiment.

Analyst sentiment and market expectations

While analysts on average predict a slight year-over-year (YoY) decline in EPS from 43.10p to 39.68p, revenue is expected to show modest growth from £7.36 billion to £7.41 billion. GSK has reaffirmed its full-year 2025 guidance, projecting a 3–5% increase in turnover and a 6–8% rise in core operating profit at CER.

According to LSEG Data & Analytics, 2 analysts have a ‘strong buy’ recommendation for GSK, 3 a ‘buy’ but 14 a ‘hold’ and 5 a ‘sell’ (as of 29/04/2025).

GSK LSEG Data & Analytics chart

GSK has a TipRanks Smart Score of ‘2 Underperform’ and a ‘hold’ rating with 1 ’buy’, 8 ‘hold’ and 2 ‘sell’ recommendations (as of 29/04/2025).

The company's strategic focus on Specialty Medicines, coupled with its share buyback programme, positions it for potential growth despite regulatory headwinds. Investors will be closely monitoring the Q1 results for indications of how these factors are influencing GSK's performance.

Analyst sentiment toward GSK has improved in recent quarters, with many viewing the stock as undervalued relative to peers like AstraZeneca. The average 12-month price target suggests potential upside from current levels of 16% to approximately 1,639p, though estimates vary widely reflecting differing views on GSK's growth prospects.

Technical analysis of the GSK share price

For traders using trading signals, understanding fundamental as well as technical analysis can provide valuable perspective. Positive earnings surprises often lead to stronger reactions when analyst sentiment is already improving. These are often accompanied by technical analysis bullish signals, potentially creating trading opportunities.

The GSK share price, though still up 3% year-to-date, slipped by nearly 20% within a month from its 1,560.5p six-month high to its April trough at 1,242.5p before gradually regaining recently lost ground.

GSK daily candlestick chart

The GSK share price is on track to close its 4-to-7 April price gap with the 1,413p 4 April low but may struggle around its 200-day simple moving average (SMA) at 1,453.6p. While it and the 6, 26 February and 1 April highs at 1,497.5p-to-1,505p cap, a resumption of the March downtrend may remain on the cards.

For a long-term bullish reversal to be confirmed, a rise and daily chart close above the six-month high at 1,560.5p would need to be witnessed.

GSK monthly candlestick chart

A fall through the November-to-April key support zone at 1,289p-to-1,242.5p would put the 2021 pandemic low at 1,208p on the map.

Competitive positioning in key therapeutic areas

GSK's performance relative to competitors in key therapeutic areas will be closely scrutinised in the Q1 results. In HIV, where the company has historically been strong through its ViiV Healthcare subsidiary, competition from Gilead Sciences and emerging players continues to intensify.

In vaccines, GSK remains a global leader but faces challenges from both established competitors like Pfizer and newer entrants leveraging mRNA technology. The company's performance in shingles (Shingrix) and meningitis vaccines provides important diversification from seasonal flu products.

Respiratory medicine represents another traditional strength for GSK, though patent expirations have impacted some older products. Growth in newer respiratory biologics will be watched closely as an indicator of successful portfolio transition.

Understanding these competitive dynamics is crucial for anyone trading pharmaceutical stocks. For those new to the sector, online trading educational resources can help develop the industry knowledge needed to interpret earnings results effectively.

How to trade GSK's Q1 earnings announcement

1. Do your research on GSK's business model, recent performance, and the broader pharmaceutical sector before making any trading decisions.
2. Choose whether you want to trade or invest based on your timeframe and risk tolerance. Pharmaceutical stocks can be volatile around earnings announcements but may offer long-term growth potential.
3. Open an account with us if you don't already have one.
4. Search for "GSK" in our platform or app.
5. Place your trade, ensuring you have appropriate risk management strategies in place, such as stop losses, to protect against unexpected market movements.

Earnings announcements often create heightened volatility, presenting both opportunities and risks. Using a demo account to practice your strategy before committing real capital can be a prudent approach, especially when trading around significant market events like earnings releases.

For those interested in longer-term exposure, our share dealing services provide a way to build positions in GSK as part of a diversified portfolio. The pharmaceutical sector often offers defensive characteristics with potential growth upside, making it an attractive component of many investment strategies.

As GSK prepares to release its Q1 2025 earnings, the focus will be on specialty medicines growth, pipeline developments, and the company's ability to navigate regulatory headwinds while delivering shareholder value. The results will provide important insights into whether GSK's transformation strategy is yielding the desired outcomes in an increasingly competitive global pharmaceutical market.