AZN - More EPS Risk (HOLD, TP £76, 12 pgs)
The ever-increasing complexity of AZN’s P&L is giving rise to growing EPS risk. In addition to the 4% EPS downgrade as a result of the Acerta pay-away (see note here), we show that consensus could be over-estimating the 2025 GM by 200bps leading to a 6% EBIT downgrade. Our detailed analysis of the various pay-aways to AZN’s partners through COGS shows that by 2025, $2.8bn of profit is paid out through this line which is considerably higher than consensus currently models. In addition, we see 6% of 2021 EBIT at risk from Chinese price cuts between 2021 & 24 due to patent expiries.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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