Wondering if GSK could be a hidden value opportunity or just another stock riding pharma’s global upswing? You are in the right place for a deep dive into what the numbers really say.
GSK’s shares have climbed 31.3% so far this year and are up nearly 40% over the past 12 months. This puts a bright spotlight on its growth and changing risk profile.
The buzz around GSK this year has been fueled by positive developments in its pipeline, strategic partnerships, and growing optimism about regulatory milestones. Headlines highlighting advances in its vaccine division and expansion into new markets have amplified investor excitement far beyond the usual quarterly news cycle.
Our latest check gives GSK a valuation score of 5 out of 6, which means it screens as undervalued on nearly every metric. In this article, we will walk through exactly how that number is calculated using the most common valuation methods. Stay tuned for a fresh approach to valuation at the end that is changing how savvy investors decide what is truly worth owning.
GSK delivered 39.1% returns over the last year. See how this stacks up to the rest of the Pharmaceuticals industry.
The Discounted Cash Flow (DCF) model estimates the value of a company by projecting its future cash flows and then discounting them back to today’s value. This approach aims to determine what those future pounds are worth in present terms.
GSK’s current Free Cash Flow stands at £5.13 billion. Analyst estimates forecast this figure growing steadily, with Simply Wall St projections indicating Free Cash Flow will reach nearly £7.99 billion by 2029 and over £9.85 billion a decade out. While analysts typically provide forecasts for up to five years, Simply Wall St extends the projection further by applying reasonable industry growth trends to cash flow estimates over a longer period.
Based on the DCF model, the estimated intrinsic value for GSK is £45.51 per share. This figure represents a substantial 60.7% discount compared to the current trading price. According to these cash flow projections, the market may be significantly undervaluing GSK’s shares at this time.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests GSK is undervalued by 60.7%. Track this in your watchlist or portfolio, or discover 927 more undervalued stocks based on cash flows.
GSK Discounted Cash Flow as at Nov 2025
Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for GSK.
For established, profitable companies such as GSK, the Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics. The PE ratio gauges how much investors are willing to pay for each pound of earnings, making it a practical benchmark for companies that consistently generate profits.
The “right” or fair PE ratio for a stock depends not just on its current profits, but also on future growth expectations and business risk. Companies with higher projected earnings growth or lower risk often justify a higher PE, while those with more uncertainty or slower growth may trade at a discount.
GSK currently trades at a PE ratio of 13.1x. This is noticeably lower than the average PE for the pharmaceuticals industry, which stands at 23.1x. It is also below the peer average of 17.4x. However, just looking at these benchmarks may ignore important nuances. That is where Simply Wall St’s proprietary “Fair Ratio” comes in.
The Fair Ratio for GSK is calculated at 25.4x, reflecting factors such as expected earnings growth, profit margins, GSK’s industry, company-specific risks, and its overall market capitalization. This makes it more comprehensive than a simple comparison with peers or industry norms, which can overlook company-specific strengths or risks.
With GSK’s actual PE (13.1x) significantly below the Fair Ratio, the data suggest the stock is trading at a valuation well below what would be expected given its fundamentals.
Result: UNDERVALUED
LSE:GSK PE Ratio as at Nov 2025
PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1430 companies where insiders are betting big on explosive growth.
Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is simply your story, your own perspective on a company’s outlook, built on your assumptions for future revenue, earnings, margins, and an estimated fair value.
Narratives go a step beyond traditional ratios by linking GSK’s story to a dynamic financial forecast and arriving at a fair value that makes sense for you. They are easy to create and ready for you to explore on Simply Wall St, right within the Community page used by millions of investors globally.
With Narratives, you do not just see what the numbers say, but why they matter, helping you decide whether to buy or sell by transparently comparing your Fair Value with the current market price. Plus, every Narrative is kept up to date, automatically reflecting the latest news or earnings to ensure your view evolves alongside real company developments.
For example, one GSK Narrative might target a fair value as high as £78 per share, while another might take a far more conservative view at just £11.20. This illustrates how different investors weigh risks, rewards, and future prospects. With Narratives, your investment decisions become as adaptable and personalized as your view of the company’s future.
Do you think there’s more to the story for GSK? Head over to our Community to see what others are saying!
LSE:GSK Community Fair Values as at Nov 2025
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include GSK.L.
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