GlaxoSmithKline PLC

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GSK : NYSE : Health Care
$45.12 | %
Today's Range: 0.00 - 0.00
Avg. Daily Volume: 3,479,900
07/27/16 - 4:02 PM ET

Financial Analysis


GLAXOSMITHKLINE PLC's gross profit margin for the first quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. GLAXOSMITHKLINE PLC has weak liquidity. Currently, the Quick Ratio is 0.75 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has significantly decreased by 63.42% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)9088.798463.02
EBITDA ($mil)0.00.0
EBIT ($mil)1971.641291.95
Net Income ($mil)405.5412012.17


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)6452.7615389.06
Total Assets ($mil)78346.2586124.06
Total Debt ($mil)24421.8127414.59
Equity ($mil)4038.1911039.49


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin67.0165.82
EBITDA Margin0.00.0
Operating Margin21.6915.27
Sales Turnover0.460.41
Return on Assets1.0317.63
Return on Equity20.11137.61
Debt Q1 FY16 Q1 FY15
Current Ratio1.141.32
Debt/Capital0.860.71
Interest Expense260.3283.64
Interest Coverage7.574.56


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)2429.02415.0
Div / share1.230.7
EPS0.174.95
Book value / share1.664.57
Institutional Own % n/a n/a
Avg Daily Volume3472899.03838332.0

Valuation


HOLD. GLAXOSMITHKLINE PLC's P/E ratio indicates a significant premium compared to an average of 45.39 for the Pharmaceuticals industry and a significant premium compared to the S&P 500 average of 25.05. For additional comparison, its price-to-book ratio of 26.23 indicates a significant premium versus the S&P 500 average of 2.81 and a significant premium versus the industry average of 8.86. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. After reviewing these and other key valuation criteria, GLAXOSMITHKLINE PLC proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
GSK 132.12 Peers 45.39   GSK 26.66 Peers 31.23

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

GSK is trading at a significant premium to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

GSK is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
GSK 0.44 Peers 16.56   GSK 0.08 Peers 0.58

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

GSK is trading at a significant discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

GSK trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
GSK 26.23 Peers 8.86   GSK -94.73 Peers -19.27

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

GSK is trading at a significant premium to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, GSK is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
GSK 2.91 Peers 23.05   GSK 3.05 Peers 6.33

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

GSK is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

GSK significantly trails its peers on the basis of sales growth

 

 

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