Down 17%, does the GSK share price scream buy?

It has been far from a smooth journey for the GSK share price recently. But this Fool likes the look of the stock now that it is down nearly 20%.The post Down 17%, does the GSK share price scream buy? appeared first on The Motley Fool UK.


It has been a turbulent 12 months for the ( ) share price. Back then it was trading for 1,316.6p.

Today, it’s 1,509.9p, or 14.7% higher.

But that doesn’t paint the full picture. During that time, the stock has been on a . And shareholders have certainly had to brace themselves at points.

Right now, the stock is down around 17% from its 52-week high after a recent tumble. I’m sensing a buying opportunity. Before I explain why, it’s best to explore what’s been behind the volatility that its share price has been experiencing.

There’s one main factor. It’s down to potential litigation related to , a heartburn drug that was removed from the market in 2019 after being linked to cancer. While this has been ongoing for a few years, there have been a couple of developments this year.

The most recent update was the catalyst for its share price decline. A Delaware judge ruled in favour of more than 70,000 lawsuits related to the drug and its link to causing cancer going forward. Its share price slid around 11% on the back of the news.

It hasn’t got much better from there. Since then, the stock has continued on its spiral. It has lost a further 5.

5% of its value despite GSK saying it will appeal and “ ” against the claims. Yet despite the uncertainty this creates, I think GSK looks like a bargain. Let’s start with its attractive valuation.

It currently trades on a of 13.8 and a forward P/E of 10.3.

I think that looks like good value. Its long-term historical average.