Barclays Capital has recently expressed its confidence in AstraZeneca PLC (LSE:AZN), a major biopharmaceutical firm, by recommending an ‘overweight’ position and setting a target price of £135 per share. This target price represents a significant premium to the current market valuation of £101 per share.
One of the driving factors behind Barclays’ optimistic assessment is AstraZeneca’s strong performance in the third quarter, which prompted the company to raise its full-year guidance to levels that align closely with Barclays’ estimates. This positive development demonstrates the company’s ability to deliver solid results and reinforces the investment outlook.
A notable strategic move by AstraZeneca was the acquisition of ECC5504, an oral GLP-1 receptor agonist used in diabetes treatment, which has also found success in the weight management market. Despite experiencing an initial surge in share price following this acquisition, the stock price has since stabilized.
Barclays acknowledges the competitive pressures AstraZeneca faces in certain drug lines, such as Calquence and Lynparza, and has adjusted its forecasts for these products accordingly. However, this cautious adjustment does not overshadow the overall positive outlook for the company.
One of the key factors supporting AstraZeneca’s investment prospects is its commitment to research and development (R&D). Barclays anticipates a 10% growth in R&D by 2024, which underscores the company’s dedication to innovation and future growth.
In terms of valuation, AstraZeneca is currently valued at 15.1 times its 2024 estimated core price-to-earnings (P/E) ratio, surpassing the sector average of 13.6 times. This indicates a robust expected compound annual growth rate (CAGR) in earnings per share (EPS) of 10.8% from 2024 to 2027, outpacing the sector’s forecast of 9.4%.
Looking ahead, AstraZeneca has several significant milestones on the horizon. These include advancements in COVID-19 prevention, breakthroughs in cancer treatments, and progress in other key drug trials. These upcoming milestones have the potential to shape the company’s performance and enhance its investment appeal in the near future.
1. What is AstraZeneca’s current market valuation?
AstraZeneca is currently valued at £101 per share in the market.
2. What was AstraZeneca’s recent acquisition?
AstraZeneca recently acquired ECC5504, an oral GLP-1 receptor agonist used in diabetes treatment.
3. What is Barclays’ outlook on AstraZeneca’s drug lines?
Barclays acknowledges the competitive pressures faced by AstraZeneca in certain drug lines, but the overall outlook remains positive.
4. What is the projected growth in AstraZeneca’s earnings per share?
AstraZeneca is expected to achieve a compound annual growth rate (CAGR) in earnings per share (EPS) of 10.8% from 2024 to 2027.
5. What upcoming milestones are expected for AstraZeneca?
AstraZeneca has significant milestones on the horizon, including advancements in COVID-19 prevention, cancer treatments, and other key drug trials. These milestones could impact the company’s future performance and investment prospects.