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Our monthly Ice Best Buys Now are designed to highlight our team’s three favourite, most timely Buys from our growing list of income-focused Ice recommendations, to help Fools build out their portfolios.
“Best Buys Now” Pick #1:
GSK (LSE: GSK)
- Pure play drug developer GSK has thrived since spinning off its consumer health business, Haleon. Sales growth has accelerated, profits are up, and management is using the company’s healthy balance sheet and cashflow to re-invest in future growth drivers.
- These trends continued into Q1 of the new year as constant currency sales raced up 13% year-on-year (10% including the impact of Covid-19 solutions sales in the prior period) thanks to bumper demand for its vaccines and newer treatments.
- Although profits were flat on a statutory basis in the quarter, management increased full year profit guidance and are now calling for 8%-10% adjusted earnings per share growth for the year as a whole.
- Newsflow from the company’s pipeline has been largely pleasing as well with some good clinical trial results and further acquisitions of other promising treatments continuing.
- At around 11x consensus forward adjusted earnings while offering up the prospect of sustainable high single-digit or possibly even low double-digit earnings growth for some time to come, we think GSK is worth taking a closer look at in May.
