AZN - Running Out of Steam; 4% EPS D’grade (HOLD, TP £76 [£70], 16 pgs)
Having been one of the early AZN Bulls, we downgraded AZN to HOLD earlier this year. The COVID Vaccine & the early ADAURA trial took over the AZN story through 2020. However, we show that there is now a 4% EPS downgrade to cons. EPS 2021&22 from the Calquence pay-away to Acerta, that the COVID vaccine offers very little commercial upside, the range of AZN EPS is the highest in the sector due to the significant one-off “earnings” adding significant risk & after adjusting for these one-offs, our 2021 EPS falls by 7%. In addition, cons. will soon incorporate 2026 EPS into the investment horizon which includes the Farxiga patent expiry ($3bn). We show that from 2024-27, c.$7bn of sales face patent losses. We believe that the AZN bull run has run its course for now.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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