February 1, 2024
Top 10 Stock GSK Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: GSK – Top 10 Stock in FTSE 100 Index
GSK is listed as a top 10 stock on February 01, 2024 in the market index FTSE 100 because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 49 (49% performer), Obermatt assesses an overall hold recommendation for GSK on February 01, 2024.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Pharmaceuticals |
| Index | FTSE All Shares, FTSE 100, FTSE 350, Dividends Europe, Employee Focus EU, Diversity Europe, Human Rights |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View GSK Hold
| 360 METRICS | February 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 81 |
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| GROWTH | ||||||||
| GROWTH | 43 |
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| SAFETY | ||||||||
| SAFETY | 6 |
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| SENTIMENT | ||||||||
| SENTIMENT | 68 |
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| 360° VIEW | ||||||||
| 360° VIEW | 49 |
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ANALYSIS: With an Obermatt 360° View of 49 (better than 49% compared with alternatives), overall professional sentiment and financial characteristics for the stock GSK are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for GSK. The consolidated Value Rank has an attractive rank of 81, which means that the share price of GSK is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 81% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 68, which means that professional investors are more optimistic about the stock than for 68% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 43, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 6, meaning the company has a riskier financing structure than 94 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 49, GSK is worse than 51% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 81) and positive market sentiment in the professional investor community (Sentiment Rank of 68), but growth expectations are below-average (Growth Rank of 43) and the financing structure is on the risky side(Safety Rank of 6). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of GSK is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for GSK positive
ANALYSIS: With an Obermatt Sentiment Rank of 68 (better than 68% compared with alternatives), overall professional sentiment and engagement for the stock GSK is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for GSK. Analyst Opinions are at a rank of 23 (worse than 77% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 65, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in GSK. Even better, the Professional Investors rank is 96, meaning that professional investors hold more stock in this company than in 96% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 55, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 55% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 68 (more positive than 68% compared with investment alternatives), GSK has a reputation among professional investors that is above-average compared with that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: GSK Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 81 (better than 81% compared with alternatives) for 2024, GSK shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for GSK. Price-to-Sales (P/S) is 62, which means that the stock price compared with what market professionals expect for future sales is lower than for 62% of comparable companies, indicating a good value concerning GSK's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 86% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 92 (dividends are expected to be higher than 92% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 71% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for GSK to 29. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 81, is a buy recommendation based on GSK's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner in assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. ...read more
Growth Strategy: GSK Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 43 (better than 43% compared with alternatives), GSK shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for GSK. Profit Growth has a rank of 60, which means that currently professionals expect the company to grow its profits more than 60% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 72 (above 72% of alternative investments). But Sales Growth has a below the median rank of 27, which means that, currently, professionals expect the company to grow less than 73% of its competitors, and Capital Growth also has a lower rank of 30. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 43, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for GSK. ...read more
Safety Strategy: GSK Debt Financing Safety risky
| SAFETY METRICS | February 1, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 6 |
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| REFINANCING | ||||||||
| REFINANCING | 7 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 45 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 6 |
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ANALYSIS: With an Obermatt Safety Rank of 6 (better than 6% compared with alternatives), the company GSK has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of GSK is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for GSK. Liquidity is at 45, meaning that the company generates less profit to service its debt than 55% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 6, meaning the company has an above-average debt-to-equity ratio. It has more debt than 94% of its competitors. Finally, Refinancing is at a rank of 7 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 93% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 6 (worse than 94% compared with alternatives), GSK has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: GSK Below-Average Financial Performance
| COMBINED PERFORMANCE | February 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 81 |
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| GROWTH | ||||||||
| GROWTH | 43 |
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| SAFETY | ||||||||
| SAFETY | 45 |
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| COMBINED | ||||||||
| COMBINED | 32 |
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ANALYSIS: With an Obermatt Combined Rank of 32 (worse than 68% compared with investment alternatives), GSK (Pharmaceuticals, United Kingdom) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of GSK are a good value (attractively priced) with a consolidated Value Rank of 81 (better than 81% of alternatives) but show below-average growth (Growth Rank of 43), and are riskily financed (Safety Rank of 6), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 32, is a hold recommendation based on GSK's financial characteristics. As the company GSK's key financial metrics exhibit good value (Obermatt Value Rank of 81) but low growth (Obermatt Growth Rank of 43) and risky financing practices (Obermatt Safety Rank of 6), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 81% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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