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The share worth of the FTSE 100‘s largest firm — AstraZeneca (LSE: AZN) — fell 3.7% right now (29 April). This got here after the pharma behemoth reported its Q1 outcomes.
What didn’t buyers like? Let’s have a look.
A miss on the highest line
AstraZeneca’s year-on-year income rose 7.2% — or 10% at fixed trade charges (CER) — to $13.6bn. Its oncology section, accounting for 42% of gross sales, grew 10% (13% CER) to $5.6bn, pushed by sturdy performances from medicine Imfinzi (lung and bladder most cancers) and Enhertu (breast and lung most cancers).
Whereas this seems to be strong stuff, analysts had anticipated the top-line determine to be $13.8bn. So, there was a income miss, albeit a small one. As a shareholder myself, I’m not significantly fearful about this.
The agency did report core earnings per share (EPS) of $2.49, beating estimates of $2.27. That represented a 21% rise, however there have been some one-off tax advantages in there.
CEO Pascal Soriot commented: “Our sturdy progress momentum has continued into 2025 and we have now now entered an unprecedented catalyst-rich interval for our firm. Already this yr we have now introduced 5 constructive Part III research readouts…Total, we’re making wonderful progress towards our ambition of $80bn in whole income by 2030.”
Tariffs and China
AstraZeneca addressed two issues which have been hanging over it: the potential impression of US tariffs and points in China.
On tariffs, it stays dedicated to investing and rising within the US, the place it already has 11 manufacturing websites throughout small molecules, biologics, and cell remedy, in addition to two giant R&D websites.
AstraZeneca says the overwhelming majority of its medicines bought within the US are made domestically. But it’s seeking to switch extra manufacturing stateside.
As such, if pharma tariffs are in keeping with different sectors, the corporate’s steering for 2025 will stay within the vary it has already set out. That’s for income to extend by a excessive single-digit proportion and core EPS to rise by low double digits.
After all, the chance is that we don’t know what the tariffs on the pharmaceutical trade will find yourself being. We additionally don’t know what plans the Trump administration has for the sector normally and drug costs specifically.
Nevertheless, AstraZeneca is eager to stress its resilience, saying its twin provide chains in China and the US are “largely segregated“. The agency can also be rising its presence in China by constructing a brand new R&D facility in Beijing.
In relation to potential unpaid duties on Enhertu imports in China, it mentioned it might must pay a advantageous of as much as $8m if discovered liable. Once more, I’m not fearful about this, based mostly on what we all know.
Price a glance
The inventory is now buying and selling at 15.8 occasions ahead earnings. I don’t suppose that’s a excessive worth to pay for a top quality progress agency like this, particularly when there’s a 2.4% dividend yield added to the combination.
Wanting on the share worth targets, analysts additionally appear bullish. The common one-year goal is 13,560p, which is 33% greater than the present worth, whereas 24 out of 32 analysts price the inventory as a Robust Purchase.
After a 23% fall since September, I feel the inventory now appears to be like enticing and is unquestionably price contemplating.
