AZN - Higher Costs Support Rapid Growth (BUY, TP £95 [£100], 10 pgs)
Following the recent share price underperformance as the market frets about AZN’s margins, we have conducted a detailed analysis of the AZN cost structure. We show that AZN has benefitted from a ~$3bn revenue upgrade in 2026 over the last 3mths but we had failed to incorporate the higher costs associated with these revenues as had consensus, in our view. We downgrade our 2026 EPS by ~5% due to higher costs but still forecast 10% CAGR EPS growth 2022-26 and see multiple sources of upside to our forecasts. Our new £95 PT implies AZN would trade on 16x 2023 EPS.For access to the full note, please contact Naresh Chouhan ( )
AstraZeneca is a holding company. Through its subsidiaries, Co. operates as a biopharmaceutical company engaged in discovering, developing, manufacturing and commercializing its pipeline of small molecule and biologic prescription medicines, including targeted business development through collaboration, in-licensing and acquisitions. Co. is focused on three main therapy areas: Oncology, Cardiovascular and Metabolic Diseases, and Respiratory. Co. is also selectively active in autoimmunity, infection and neuroscience. In addition, Co. works across small molecules, oligonucleotides and other drug platforms, as well as biologic medicines.
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