GSK (LSE: GSK) shares used to be a no-brainer buy. Sadly, that was a long time ago. They’ve offered slim pickings for the last decade. Actually, make that two.
In August 2006, the GSK share price traded at around 1,500p. Today, it’s 1,815p. That’s an increase of just 21% over 20 years. Investors have got dividends on top, but they haven’t been brilliant either. What’s gone wrong?
The short answer is that the pharmaceuticals giant’s spent years struggling to convince investors it has the drugs to deliver meaningful growth.
Why’s this FTSE 100 stock struggling?
There have been pipeline disappointments, patent expiries and expensive attempts to build a new generation of medicines. R&D spending has risen sharply, reaching £6.57bn last year. That investment’s necessary, but shareholders have paid the price.
The board froze the dividend at 80p per share in 2015 and held it there for seven straight years. Then came the Haleon demerger in 2022 and the payout fell to 57.75p, before recovering to 66p last year.
Overall performance has been patch too, as full-year profits for the last five years show:
- 2025 – £7.93bn
- 2024 – £6.01bn
- 2023 – £6.75bn
- 2022 – £6.73bn
- 2021 – £6.20bn
2024 was hit by multi-billion pound Zantac settlement provisions, although strong growth in Specialty Medicines and Vaccines boosted the 2025 number.
Emma Walmsley led GSK for almost nine years but when her departure was announced in September 2025, the shares jumped amid hopes a new boss could finally unlock GSK’s potential.
The shares are up 30% over one year but now they’re falling again, down 15% over six months. So anyone who had £6,000 in GSK shares then would have just £5,100 today, ignoring dividends.
Q2 results (28 July) suggest new boss Luke Miels has his work cut out. While core operating profits rose 7% to £2.8bn, total operating profit plunged 75%, largely because of a £1.3bn impairment linked mainly to a failed drug development.
Once again, GSK needs to replenish the pipeline and deal with looming patent expiries. Yet it’s not all gloom. 2026 sales and core-operating profit are expected to land at the upper end of their respective 2026 guidance ranges of 3%-5% and 7%-9%. Miels is targeting more than £40bn of annual sales by 2031.
Is the stock good value?
I believe in buying shares for the long term. But 20 years is an awfully long time to kick your heels. Today, GSK shares trade on a modest price-to-earnings ratio of about 10.8. That looks cheap but I won’t get carried away. I bought them on a P/E of eight, and they haven’t come through for me. The trailing dividend yield is 3.64%.
I don’t have any other healthcare exposure so I’m hanging on for diversification. Yet if I didn’t own GSK shares, I wouldn’t rush to buy them. So I won’t stick my neck out and say they’re worth considering today. I can see far more exciting dividend and growth stocks on the FTSE 100.
Should you invest £5,000 in GSK right now?
When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if GSK made the list?
Harvey Jones owns shares in GSK.
This story originally appeared on Motley Fool
