After it crashes 25%, should I buy this stock market darling in my Stocks and Dividends ISA?

I am keen to start working on this year’s Stocks and Shares ISA grant and one FTSE 100 Blue chip interests me. This company is a pharmaceutical giant GSK (LSE: GSK) and has taken a hit recently.

I saw that firsthand, because I have a small GSK that manages my self-invested pension (SIPP). It was a big disappointment but I was tempted to take advantage of its recent issues by downgrading and buying more.

So what is GSK sick? First, there is the long-term crisis that CEO Emma Walmsley has faced since taking over in 2017. GSK needs to replenish its drug pipeline, to take on the blockbuster blockbusters as they come off patent.

Can GSK’s share price sustain?

This includes pouring money into research and development, and Walmsley has boosted cash by setting the dividend per share at 80p per share. It was reduced to 44p in 2022 and 42p last year. While I feel this way of ‘tomorrow’ is right, the future never seems to come.

In 2017, the stock, then trading as GlaxoSmithKline, was considered one of the best stocks in the FTSE 100with a yield of 6.05%. That’s not the case anymore. Today’s trailing yield of 4.34% is good, but has been artificially inflated by recent price declines.

Shares of GSK are down 21.43% in the past six months. Although they increased by 7.63% in one year, they decreased by 24.78% over five years.

Looking at the 10-year price chart, I am not happy at all. GSK’s share price has increased several times, so that it always loses its profits. Overall, it has fallen over the decade, from 1,515p to 1,337p. It’s not good.

GSK faced two major problems this year. The first was a US class action over claims that it was a cut-down version of its heartburn treatment Zantac cause cancer. This was immediately topped up by $2.2bn on 9 October, when Donald Trump won the US presidential election.

Trump trades back on big pharma

Pharmaceutical stocks rallied across the board when Trump nominated anti-vaccinationist Robert F Kennedy, Jr, as US Health Secretary on November 15th. GSK’s share price hit a two-year low on the news.

Trump has also worried the industry over plans to lower drug prices, including making it easier to import the drug into the US from Canada.

This makes it a risky time to invest in GSK even though it seems the worst case has been priced in. Shares look cheap to trade at 8.44 times earnings.

The 16 analysts providing one-year share price forecasts for GSK have set an average target of 1,739p. If that happens, shares will rise 30% from here. There is a range there, however, from a high of 2,160p to a low of 1,350p. Some of those predictions may predate Trump’s win, however.

Of these buyers, seven named GSK a ‘strong buy’, while just two called it a ‘strong sell’. The most popular decision is ‘hold’, accepted by 10 of them. That is my position as well. I will hold what I have in my SIPP, but I will not buy more from my stocks and shares ISA. GSK has been a pain for investors for a long time.