GSK plc (GSK) reported full-year 2024 revenue of £31.4 billion, a 3.5% increase from FY 2023, driven largely by strong performances in Specialty Medicines and General Medicines. Despite this topline growth, profitability came under pressure. Net income dropped 48% to £2.58 billion, as rising costs and R&D investment reduced margins. Earnings per share fell sharply to £0.63, down from £1.22 the prior year, missing analyst estimates by roughly 25%. Still, core operating profit grew 13% to £9.1 billion, and GSK emphasized that its operational progress remains firmly aligned with guidance.
The company’s Specialty Medicines segment, up 19% year-over-year, continues to power results, offsetting a 3% decline in vaccines and steady 6% growth in general medicines. Specialty products like Nucala and Jemperli contributed meaningfully to growth, while strong cash generation supported ongoing shareholder returns. GSK delivered £7.9 billion in cash from operations, raised its dividend by 3% to 61p per share, and maintained a progressive payout policy that balances reinvestment with yield stability.
CEO Emma Walmsley reiterated confidence in the company’s strategy, noting that GSK’s streamlined focus on biopharma and its growing R&D pipeline position it well for long-term growth. The company now generates 67% of sales from Specialty Medicines and Vaccines, up from 58% in 2021, a sign of successful portfolio transformation since the Haleon spin-off. Year-to-date, GSK shares are up about 19%, outperforming both the FTSE 100 and the broader U.K. pharma sector.
Financial Story: Growth Amid Margin Pressure
| Metric | FY 2024 | FY 2023 | YoY Change | Commentary |
|---|---|---|---|---|
| Revenue | £31.4B | £30.4B | ▲ 3.5% | Specialty Medicines led growth; Vaccines down 3% |
| Core Operating Profit | £9.1B | £8.0B | ▲ 13% | Strong pricing and product mix gains |
| Net Income | £2.58B | £4.96B | ▼ 48% | Higher R&D and restructuring costs |
| Operating Margin | 29.2% | 27.8% | ▲ 140 bps | Margins improved on product mix, despite SG&A rise |
| EPS | £0.63 | £1.22 | ▼ 48% | Below expectations; one-time costs impacted results |
| Core EPS | 159.3p | 142.3p | ▲ 12% | Adjusted measure excluding exceptional items |
| Cash from Operations | £7.9B | £7.2B | ▲ 10% | Reflects solid operational efficiency |
| Dividend per Share | 61p | 59p | ▲ 3% | Continues progressive payout policy |
| Net Debt | £13B | £15B | ▼ 13% | Deleveraging continues post-Haleon spin-off |
GSK’s 2024 results underscored a business that’s steadily growing but facing profitability challenges as it invests heavily in its pipeline. Revenue growth was healthy, particularly in Specialty Medicines, where sales surged on the back of immunology and oncology products. However, higher administrative and research costs weighed on overall profitability, pulling net income nearly in half. The company pointed to ongoing investments in its R&D ecosystem and digital infrastructure as necessary foundations for sustainable innovation-led growth.
Operating cash flow and margins tell a more optimistic story. Gross margin expanded by 40 basis points to 45.7%, supported by price mix and lower input costs, while underlying EPS rose 12% at constant exchange rates. GSK’s balance sheet remains solid, with leverage declining as it channels resources into its most promising late-stage assets. Management reaffirmed its confidence in achieving 2025 guidance, even as reported profit temporarily lags behind operational gains.
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1. Specialty Medicines and Vaccines Anchor Performance
GSK’s pivot toward high-value therapeutic categories continues to reshape its growth profile. Specialty Medicines now make up nearly 40% of total revenue, reflecting steady traction from asthma and oncology treatments such as Nucala, Jemperli, and Blenrep. The company’s next wave of assets, including Depomimab and Gepotidacin, could further strengthen its leadership in immunology and infectious diseases. These newer therapies are part of five potential major approvals expected in 2025, which management believes will materially expand its addressable market.
The Vaccines division remains a pillar of stability, even as COVID-related tailwinds fade. While segment revenue slipped modestly year over year, underlying demand for established products like Shingrix and the meningococcal portfolio remained solid. Meanwhile, the company’s next-generation RSV and meningococcal vaccine candidates, including MenABCWY, are progressing through Phase III trials. Together, these franchises position GSK to maintain its global vaccine leadership while refreshing its product mix toward premium, higher-margin offerings.
2. Pipeline and Long-Term Outlook
At the core of GSK’s long-term transformation is its deep and diverse pipeline. With 85 clinical-stage programs, 27 in Phase I, 35 in Phase II, and 23 in Phase III, the company’s R&D ecosystem is among the most active in the industry. Recent investments in biologics, antibody-drug conjugates, and mRNA platforms show GSK’s intent to compete at the cutting edge of pharmaceutical science. Management has emphasized “science-led productivity,” aiming for more first-in-class discoveries that can sustain double-digit operating profit growth through 2026 and beyond.
GSK’s R&D model also reflects a pragmatic shift toward efficiency. The company is leveraging AI-based trial design, adaptive study structures, and external partnerships to reduce cycle times and development risk. Its collaboration with CureVac on mRNA vaccines and its progress in oncology assets like Blenrep and Jemperli highlight this blended innovation approach, one that balances high scientific ambition with disciplined capital allocation.
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3. Cost Discipline and Margin Outlook
Despite significant R&D outlays, GSK’s cost-control efforts are showing tangible results. Operating expenses rose only modestly in 2024, supported by productivity gains from its ongoing transformation program. The company’s gross margin climbed to 45.7%, aided by product mix improvements and manufacturing efficiency, while free cash flow increased to £7.9 billion. Management has maintained a careful balance between reinvestment in innovation and shareholder returns, evidenced by a 3% dividend increase and continued debt reduction to £13 billion.
Looking into 2025, GSK expects operating leverage to improve further as new launches scale and supply chain costs normalize. While management guided for 3–5% sales growth and 6–8% core EPS growth, investors should expect a gradual, and not explosive, recovery in profitability. The near-term story is about building resilience: tighter execution, smarter R&D spend, and a focus on incremental margin gains rather than rapid expansion. That measured approach may not dazzle the market, but it reinforces GSK’s credibility as a stable compounder in a volatile pharma landscape.
The TIKR Takeaway
GSK’s 2024 was a year of recalibration: slower net income growth, but clear operational strength and sharper focus. Specialty Medicines continue to deliver double-digit gains, underpinning confidence in the company’s long-term trajectory. The balance sheet is stronger, the dividend remains intact, and R&D productivity is accelerating. The short-term drag from higher costs and lower vaccine sales is real, but it’s also temporary, a byproduct of reinvestment.
The real question is whether pipeline execution can translate into consistent EPS growth. With multiple Phase III programs nearing completion and several high-value launches on deck, GSK’s strategy appears aligned with patient, margin-focused investors seeking gradual compounding rather than breakout gains.
Should You Buy, Sell, or Hold GSK Stock in 2025?
At current levels, GSK looks like a Hold leaning toward Buy for investors focused on income and defensiveness. The stock’s 4% dividend yield, consistent cash generation, and manageable debt profile provide downside protection, while the company’s pivot to Specialty and pipeline expansion offer credible long-term upside.
That said, EPS volatility and the risk of delayed approvals could weigh on sentiment in the near term. Investors comfortable with a steady, research-driven growth story, rather than explosive short-term gains, may find GSK’s current valuation compelling. As the company continues executing on its innovation strategy, it’s positioning itself as one of the more balanced, resilient names in European pharma.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
