After a major move higher in the second half of 2025 and early 2026, GSK (LSE: GSK) shares have run out of steam. Year to date, they’re now only up about 2% meaning that they’re trailing the FTSE 100 index for the year.
Do they still have potential? Let’s take a look at City analysts’ medium-term price targets to see what the experts think.
Share price gains ahead?
At present, the average analyst 12-month price target for GSK is 2,099p. That’s about 12% higher than today’s share price.
If it was to be hit, a £6,000 investment today would grow to a little over £6,700. Add in dividends and investors could be looking at closer to £6,900.
Is that price achievable?
Of course, analysts’ price targets should never be relied upon. Often they don’t come to fruition.
However, in this case, I don’t see the average price target as unrealistic. Because there are several factors that could lead to a share price boost over the next 12 months.
Two reasons to be bullish
One is the company’s low valuation. At present, GSK sports a forward-looking price-to-earnings (P/E) ratio of just 10.4, making it one of the cheaper Big Pharma stocks in the market.
For reference, UK rival AstraZeneca is on 16.2 right now. Meanwhile, Johnson & Johnson is on about 22.
Another is market dynamics. In the second half of 2026 and/or 2027, I wouldn’t be surprised to see more money flow into the healthcare sector.
Today, this sector offers long-term growth at reasonable valuations. It also offers a hedge against a tech sector meltdown.
Why doesn’t the market like GSK today?
That said, for the shares to hit that price, we’d need to see investor sentiment towards the company improve. Right now, it’s quite weak.
One reason for this is that the company’s Q1 earnings were boosted by one-off factors. Q1 also showed soft trends in GSK’s general medicines business.
Another is that the company recently said that it will halt development of camlipixant – a drug designed to treat chronic coughing – after it failed two late-stage trials. GSK had previously forecast peak annual sales of about £2.5bn here, so the move creates some uncertainty in relation to the group’s 2031 target of £40bn in annual revenue.
A third factor impacting sentiment is earnings forecasts. Like the share price, these are falling.
Still worth it?
So are the shares worth considering for a portfolio or holding on if someone already owns them? I think so.
There’s no guarantee they will produce strong returns from here – we may need to see growth pick up for the shares to find some positive momentum. However, with a yield of nearly 4% on offer, I see potential for solid total returns in the years ahead.
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Edward Sheldon does not hold any positions in the companies mentioned
