GSK PLC (LSE:GSK, NYSE:GSK)’s seemingly positive earnings release on Wednesday has been labelled as just that by Stifel analysts, who were left mulling reasons for a subsequent drop in its share price.
Though GSK lifted its full-year guidance following strong third-quarter trading, Wednesday’s update actually prompted a 2% slide in the pharmaceuticals giant’s shares.
“It is getting harder and harder to please the market when reporting quarterly numbers those days in the pharma sector,” Stifel commented in response.
“We can hardly say that the report was not bottom-line net positive.”
So what did the market see, and subsequently choose to flee from, in the update?
According to Stifel, the firm’s 10% jump in third-quarter sales to £8.15 billion and 15% increase in operating profit to £2.77 billion could indeed mark unbeatable figures for GSK.
These factors prompted GSK to raise its adjusted earnings per share growth guidance to as much as 20% from 2022's 139.7p for the full year - up from expectations of 17% beforehand.
Stifel anticipated that this per-share earnings growth would largely stagnate next year though, with the figure growing by just 2% to 3% in 2024.
“What is left for 2024?” the bank asked, pointing to the likely deceleration in sales of GSK’s Shingrix treatment and mere modest growth for its Arexvy vaccine.
An end of royalty flows from its Gardasil drug coupled with increased taxes could also weigh, Stifel explained.
“We would not completely rule out that a first guidance in late January might then include 0% growth as the low-end of the range,” the bank added.
GSK shares fell 2.2% further to 1,391.40p on Thursday.