GSK Shares Rise as Hargreaves Lansdown Warns Valuation Now Prices In ‘Material Upgrades’

GSK (LON: GSK) shares gained close to 7% on Wednesday after the drugmaker reported full-year results that exceeded expectations, prompting Hargreaves Lansdown to describe the update as “another step towards [its] mid-term target.”

The broker's head of equity research, Derren Nathan, said the figures offered reassurance under new chief executive Luke Miels but cautioned that the stock’s strong rally means expectations are now elevated.

Full-year sales rose 7% to £32.7 billion, driven by a 17% increase in speciality medicines, with oncology revenue jumping more than 40% on strong demand and expanded use cases.

Underlying operating profit grew 11% to £9.8 billion, which Hargreaves Lansdown noted “reflect[ed] the positive impact of a shift to higher margin products, and efficiency gains.” Free cash flow rose 41% to £4 billion.

The group maintained its 2031 sales outlook of more than £40 billion and guided to 2026 sales growth of 3–5% and underlying operating-profit growth of 7–9%.

Nathan stated that Miels’ first results “were reassuring,” adding that reaffirming the mid-term target “helped provide a further boost to sentiment.”

However, the analyst struck a more cautious tone on valuation. It said “the valuation significantly strengthen[ed] over the last year,” arguing that it “now anticipates some material upgrades to consensus forecasts.”

Hargreaves Lansdown added: “GSK has the ingredients to get there, but the current valuation presents more downside exposure than there’s been for some time.”

The broker highlighted a solid HIV franchise, fast-growing oncology treatments and a robust late-stage pipeline, but warned that drug-pricing pressures and patent expiries remain key risks to monitor.