AZN - Upgrade to BUY (PT £90 [£76], 23pgs)
AZN has managed to solve many of the concerns we highlighted in recent notes with the proposed acquisition of Alexion. More importantly, the ~35% de-rating vs the sector (using 2022 pro-forma EPS) over the last 3mths means that the quality of earnings & lack of cashflow we were concerned about, are now priced in, in our view. This allows us to focus on the accretion from Alexion, the 17% CAGR EPS growth 2021-25, the multiple pipeline readouts in 2021, potential profitable sales from the COVID franchise & the upside from Calquence where we are $1.2bn above consensus in 2025. Moreover, we show that the $4.6bn decline in pro-forma sales 2025-27 can be replenished by the ~$40bn R&D spend to 2025.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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