UBS has cut its earnings per share (EPS) estimate for GSK PLC (LSE:GSK, NYSE:GSK) by 5% for fiscal years 2024 and 2025.
The decision comes ahead of GSK’s third-quarter results, expected on 30 October, and is mainly driven by weaker vaccine sales in the US for its key products, Shingrix and Arexvy.
UBS highlighted that Shingrix sales in the US are down 27% year-to-date.
“GSK called out an explicit effort this year to try to penetrate more of the 63% of US citizens over the age of 50 who have not taken up a shingles vaccine. This has not been successful.” said analysts.
Additionally, UBS pointed to higher net debt stemming from the £1.8 billion Zantac settlement, which also contributed to the downward revision.
Despite the EPS adjustment, UBS has maintained its 1,580p target price for GSK, citing that the vaccine sales decline is balanced by the resolution of the Zantac litigation.
GSK shares were trading 0.5% lower at 1,468.5p on Monday afternoon.