International pharma stocks GSK PLC (LSE:GSK, NYSE:GSK) and AstraZeneca PLC (LSE:AZN) may have dodged a bullet under Donald Trump’s sweeping new tariff regime, according to analysts at Shore Capital.
A White House fact-sheet suggests pharmaceutical products will be exempt from the harsher “reciprocal tariffs” aimed at key US trading partners. But there’s still a question mark over whether the 10% baseline tariffs could apply to imported drugs and vaccines.
The global nature of pharmaceutical supply chains means even partial tariffs could disrupt forecasts, particularly for big UK-listed players like GSK and AstraZeneca. Both companies have responded cautiously.
GSK says its guidance rema ins unchanged, while AstraZeneca says it’s still reviewing the details and believes essential medicines should be spared -but it’s also looking at ways to soften any impact.
With that uncertainty hanging in the air, Shore Capital expects valuation multiples for large-cap pharma to remain under pressure until companies can fully assess and communicate the potential fallout; most likely during first-quarter earnings at the end of April.
In the meantime, the analysts pose a series of unanswered questions:
- Could baseline tariffs apply to all products or only imports?
- Will companies be able to absorb or pass on costs?
- Will pricing pressures rise for U.S. consumers and insurers? Could existing US production soften the blow?
- How fast will any measures be implemented?
- And could retaliatory tariffs from other countries create knock-on effects?
Despite the short-term market jitters, ShoreCap remains upbeat on the long-term outlook for both firms. Demographics still favour the sector—populations are ageing, and demand for medicines continues to grow.
Both GSK and AstraZeneca have laid out ambitious growth plans extending well past Trump’s time in office: GSK is targeting over £40 billion in revenue by 2031, while AstraZeneca is aiming for $80 billion by 2030.
Pharma frequently finds itself in the political firing line in the US, where drug pricing is a hot-button issue.
But as Shore puts it, there’s often a difference between “travelling and arriving” - and initial fears tend to be worse than the eventual outcome. For now, investors will need to hold their nerve.
GSK shares were 3% higher, while AZ's were up 1.8% as the market assessed Trump's Liberation Day as bullet dodged.