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The share worth of the FTSE 100‘s largest firm — AstraZeneca (LSE: AZN) — fell 3.7% at present (29 April). This got here after the pharma behemoth reported its Q1 outcomes.
What didn’t traders 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 alternate charges (CER) — to $13.6bn. Its oncology section, accounting for 42% of gross sales, grew 10% (13% CER) to $5.6bn, pushed by robust 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 notably nervous 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 robust progress momentum has continued into 2025 and we now have now entered an unprecedented catalyst-rich interval for our firm. Already this 12 months we now have introduced 5 optimistic Section III examine readouts…Total, we’re making glorious 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 affect 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 massive R&D websites.
AstraZeneca says the overwhelming majority of its medicines offered within the US are made domestically. But it’s seeking to switch extra manufacturing stateside.
As such, if pharma tariffs are according to 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 share and core EPS to rise by low double digits.
In fact, the chance is that we don’t know what the tariffs on the pharmaceutical business will find yourself being. We additionally don’t know what plans the Trump administration has for the sector on the whole and drug costs particularly.
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 growing 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 stated it could must pay a high quality of as much as $8m if discovered liable. Once more, I’m not nervous about this, based mostly on what we all know.
Value a glance
The inventory is now buying and selling at 15.8 instances ahead earnings. I don’t assume that’s a excessive worth to pay for a high quality progress agency like this, particularly when there’s a 2.4% dividend yield added to the combo.
Wanting on the share worth targets, analysts additionally appear bullish. The common one-year goal is 13,560p, which is 33% increased than the present worth, whereas 24 out of 32 analysts fee the inventory as a Sturdy Purchase.
After a 23% fall since September, I believe the inventory now seems to be enticing and is certainly value contemplating.
