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I adore it when a plan comes collectively, and that’s now taking place with a FTSE 100 dividend share I purchased in March 2024. The inventory in query is pharmaceutical big GSK (LSE: GSK), which seemed good worth after I purchased it, with a value‑to‑earnings (P/E) ratio of round 8. That was crushed down by years of underwhelming efficiency.
The GSK share value continued to slip after I purchased it. The primary cause was the US class motion over its heartburn drug Zantac. No sooner was that settled with a $2.2bn payoff than US tariffs on prescribed drugs threatened. I quickly discovered myself down round 15%, which wasn’t a part of the plan, being sincere, however I stayed calm and issues are actually wanting up.
GSK shares up 12 % within the final month, lifting the 12‑month acquire to about 33%. I’m solely up round 10% personally however these are early days, as a result of this was a inventory I plan to carry years, and ideally many years.
Lengthy-term FTSE 100 play
I final lined GSK for The Motley Idiot on 28 October after I famous the share value restoration was beneath approach however the shares nonetheless seemed good worth with a P/E of 10.6. The P/E ratio had edged as much as 11.45, however that’s nonetheless comfortably under the FTSE 100 common of round 18.
On 29 October GSK revealed its Q3 outcomes they usually had been robust. Core working revenue rose 11% to £2.99bn whereas core earnings per share jumped 14% to 55p.
The board declared a 3rd‑quarter dividend of 16p a share and confirmed £2bn of share buybacks by mid‑2026, with £1.1bn already executed. The complete‑yr steering was raised too.
GSK’s pipeline lastly seems to be delivering, speciality medicines are driving development and free money circulate is powerful. The restoration feels credible.
Dealer forecasts so-so
But there are dangers. The tariff threats hasn’t totally lifted and whereas the pipeline is wanting higher, potential blockbuster medicine are by no means assured. A weak trial, regulatory setback or litigation shock might knock confidence.
Dealer forecasts produce a 12-month consensus value goal round 1,773p. Sadly, that’s really under as we speak’s value round 1,806p. If these predictions are right, the following yr received’t be pretty much as good because the final. Analyst rankings are blended too: solely 9 of 23 price GSK inventory a Purchase whereas 4 say Promote.
But I imagine that is nonetheless a discount, for traders who’ve a protracted‑time period view. No one can say the place any share value will go within the quick time period, however through the years, I’d count on GSK to ship a gentle mixture of development and revenue. The trailing yield is a modest 3.35%, however ought to develop steadily. The shares are forecast to hit 3.57% in 2025, and three.83% in 2026.
GSK seems value contemplating for traders seeking to create a balanced portfolio, together with publicity to the pharmaceutical sector, historically seen as a defensive nook of the market. Right now seems like a great entry level, given the low P/E, however traders ought to solely purchase with the long run in thoughts. That ought to all the time be a key a part of the plan when shopping for FTSE 100 shares.
