GSK (LSE: GSK) shares have become popular recently, rising over 16% in 2026 so far (and 59% in the last 12 months). Not only is this a far better return than the FTSE 100 as a whole, it also represents a shift in sentiment for a company that’s arguably been unloved for a over a decade.
But what’s behind this momentum? And is there more to come?
What’s going on with GSK shares?
I don’t think GSK’s purple patch of form is down to one thing. But let’s begin with good, old-fashioned earnings.
Full-year results for 2025 beat expectations. Revenue increased 7% to £32.7bn, helped by a 17% rise at its Speciality Medicines division (HIV, Oncology and Respiratory/Immunology). Core operating profit hit £9.8bn — an 11% uplift on the previous year.
Having been in top-tier peer AstraZeneca‘s shadow for so long, GSK’s pipeline is now starting to look more promising as well. No less than 13 new cancer drugs are currently in development, for example.
One could also argue that the market has now adjusted to the Brentford-based business’s decision spin off its consumer arm (Haleon) a few years ago and become a pure-play biopharma company. This implies a more growth-focused strategy — something that should appeal to a new audience of investors.
Still cheap
Despite it doing so well already, there are a few reasons for thinking the party might continue.
Q1 numbers are due on 29 April. Unless there are any nasties lurking, I don’t see why this stock can’t carry on rising in value. A positive sign has been the spate of director buying seen last month. We’re not talking small change either. If those who know the company best are willing to put their own money to work, I take that as very encouraging.
Second, the valuation remains reasonable. A price-to-earnings (P/E) ratio of 12 is still cheap relative to other companies in the healthcare sector. GSK also boasts above-average operating margins and returns on capital (essentially, what it gets back for the money it puts in the business), at least relative to other UK stocks.
The stock yields 3.4% too. Sure, it would be a mistake for investors to assume that any dividends are guaranteed. But GSK’s cash distributions look like they will easily be covered by expected profit. This assumes, of course, that analyst projections are on the money.
This is not to say that the £86bn cap is devoid of risk. An ongoing problem for pharmaceutical firms is that the patents on some of their drugs are set to expire. This includes GSK. On top of this, some/all of those aforementioned new drugs in development might fail.
Great option
As I type, GSK shares are the most popular buy this week on AJ Bell‘s investment platform. Given how fickle investors can be, I don’t put much weight on this. Next week, there’ll be another ‘top of the stocks’. What’s more important from a Foolish perspective is whether this is a solid pick for the long term.
In my opinion, this is the case. While some of the recent momentum may be down to the valuation simply catching up with events, this remains a great defensive option to consider buying for uncertain times.
And I’d say that’s where we are right now.
