Bernstein raises GSK target price: long-acting HIV injectable portfolio supports more durable growth

Overview

This is a Bernstein deep-dive company report on GSK plc, centered on the question: after a thorough review of its HIV business, has GSK shifted from a “low-growth company” to a “sustainable growth stock”? The conclusion is broadly positive, arguing that the market underestimates the durability of GSK’s long-acting HIV injectable portfolio, the manageable impact of patent expiries around 2031, and VH184’s contribution to long-term patent protection and margins.

Core views

The report’s core views include: first, GSK’s HIV business accounts for about 25% of 2025 sales, but the market is overestimating the negative impact of cabotegravir’s 2031e patent expiry; second, Cabenuva and Apretude, as first-mover long-acting injectables, have built competitive advantages in both treatment and PrEP markets; third, CAB 4QM and VH184 are expected to extend product lifecycles and drive patient switching from daily oral drugs to lower-frequency injectable regimens; fourth, Bernstein expects GSK’s 2026-2031e adjusted EPS CAGR to reach 9%, close to the level of European peers and well above consensus expectations for long-term growth.

Analysis framework

The report uses a proprietary HIV deep-dive model, extending the forecast period to 2040e, and remodels the US HIV treatment and PrEP markets, market share by dosing frequency, product patent expiries, generic erosion curves, ViiV margins, royalties, and contingent consideration burdens. For valuation, the target price continues to use the average of DCF and 2026-2028e EV/EBITA methodologies.

Methodology notes

• forecast_modelHIV deep-dive proprietary model to 2040

  long-term HIV business forecasting model

  Bernstein built a new HIV model covering the US HIV treatment and PrEP markets, switching across dosing frequencies, product lifecycles, market share, and margins, and extended the forecast period to 2040e.

• Valuation methodsDCF and EV/EBITA average

  average valuation using DCF and EV/EBITA

  The target price is derived from the average of DCF valuation and 2026-2028e EV/EBITA valuation; the DCF assumes an 8% WACC and a 0% terminal growth rate, while the EV/EBITA method retains a 5% premium versus European peers.

• risk_adjustmentPipeline probability of success adjustment

  pipeline probability of success adjustment

  The report applies an 80% probability of success to CAB 4QM and a 40% launch probability to VH184, incorporating them into risk-adjusted sales forecasts accordingly.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• GSK plc / GSK.LN

  core covered asset

  Strengths

  First-mover advantage in long-acting HIV injectables, VH184’s potential for extended patent protection, upgraded EPS forecasts, and higher target price.

  Weaknesses

  Still faces DTG- and cabotegravir-related patent expiries, potential near-term pressure on HIV margins, and pipeline execution uncertainty.

  Comparison

  The report believes GSK’s 2026-2031e EPS CAGR will reach 9%, close to large European pharma peers; the target price implies 11x 2030e PE, representing a 4% premium to European peers.

  Risks

  Failure in clinical development or launch of new HIV products, lower-than-expected penetration of long-acting injectables, stronger-than-expected generic erosion, and insufficient value realization from the Nuvalent acquisition.

• ViiV Healthcare

  GSK-controlled HIV specialist company and core profit source

  Strengths

  Owns HIV assets including Cabenuva, Apretude, the DTG oral portfolio, and VH184, benefiting from the trend toward long-acting injectables.

  Weaknesses

  Some products require royalty or related economic-sharing payments to Shionogi, J&J, and others; a higher mix of long-acting injectables could temporarily compress margins.

  Comparison

  Compared with traditional daily oral drugs, long-acting injectables improve convenience and help align with patient follow-up frequency in healthcare systems.

  Risks

  DTG losing US exclusivity in 2028-2030e, cabotegravir patent expiry in 2031e, and a weaker-than-expected margin recovery.

• Nuvalent

  GSK acquisition target, expanding the oncology pipeline

  Strengths

  Assets related to ALK inhibitor neladalkib and ROS1 inhibitors could enhance the long-term value of GSK’s oncology business.

  Weaknesses

  The report notes that the Nuvalent acquisition is not yet included in the current core target price, and value realization depends on clinical, regulatory, and commercialization execution.

  Comparison

  The report estimates that incorporating Nuvalent forecasts into GSK’s model could deliver up to about 10% accretion to adjusted EPS.

  Risks

  Uncertainty around acquisition integration, clinical data, competitive landscape, and launch timing.

• Gilead HIV franchise

  GSK’s main competitor in the US HIV market

  Strengths

  Gilead has a high share of the US HIV market in 2025, Biktarvy remains an important oral treatment, and Sunleca and Yeztugo position it in long-acting treatment and PrEP.

  Weaknesses

  The report argues that Gilead’s mid-term pipeline lacks assets capable of materially suppressing GSK’s long-acting injectable portfolio in HIV treatment.

  Comparison

  GSK is seen as likely to gain share from competitors such as Gilead before 2040e thanks to its first-mover advantage in long-acting injectables.

  Risks

  Stronger-than-expected performance from Gilead’s long-acting products or new pipeline could reduce GSK’s scope for share gains.

Key data

• RatingOutperformThe report cover page lists GSK’s rating as Outperform.
• Target price2,825.00 GBp / £28.25The target price was raised 7% from 2,630 GBp.
• Closing price1,950.00 GBpThe closing date was 2026-06-24.
• Implied upsideapproximately 44.9%Calculated using the 2,825 GBp target price and 1,950 GBp closing price.
• Adjusted EPS upgrade magnitudeup to 25%After the HIV deep dive, adjusted EPS forecasts for 2026-2035e were raised by as much as 25%.
• 2026-2031e adjusted EPS CAGR9%The report states that the new EPS CAGR is broadly in line with European peers.
• 2036e group sales vs. consensus39% higherThe report says the new 2036e group sales forecast is 39% above Bloomberg consensus.
• US HIV market share gain+17 percentage points by 2040eThe report expects GSK to gain a cumulative 17 percentage points of share in the US HIV market by 2040e.
• CAB 4QM probability of success80%Because cabotegravir is already an approved molecule, the report uses an 80% probability for the high-dose once-every-four-months version.
• VH184 launch probability40%VH184 is in late Phase II, and the report uses a 40% launch probability.

Impact & implications

If the report’s view proves correct, GSK’s investment narrative would shift from that of a low-growth drugmaker under patent expiry pressure to that of a large pharmaceutical company with long-acting HIV-driven growth, sustainable EPS expansion, and room for valuation rerating. Improved durability in the HIV business would also strengthen market recognition of ViiV’s long-term cash flow, GSK’s innovation capability, and capital allocation.

Risks

• CAB 4QM or VH184 clinical data, regulatory approval, or launch timing may fall short of expectations.
• Generic competition after cabotegravir’s 2031e patent expiry may be stronger than assumed in the report.
• Patient and physician acceptance of long-acting injectable regimens may be lower than channel research expectations.
• PrEP market expansion, improved payer coverage, and switching toward less frequent dosing may proceed more slowly than expected.
• ViiV margins may come in below forecasts due to royalties, COGS payments, or product mix changes.
• Nuvalent acquisition integration or pipeline commercialization may fail to achieve the expected EPS accretion.

What to watch

• Phase III data readout for Apretude 4QM in the second half of 2026.
• Initiation of the Phase III trial for the Cabenuva 4QM treatment indication and subsequent data.
• Follow-up Phase III design, combination regimen, and patent protection progress for VH184.
• Changes in GSK’s share in the US HIV treatment and PrEP markets.
• The trend in ViiV EBIT margin before and after DTG patent expiry.
• GSK management’s integration plan and EPS accretion guidance for the Nuvalent acquisition.