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AstraZeneca (AZN) Stock Rises 18% YTD: Should You Buy?
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AstraZeneca’s (AZN - Free Report) stock has risen 18.4% so far this year, underperforming an increase of 23.4% for the industry, as seen in the chart below. AstraZeneca’s stock has, however, outperformed the sector as well as the S&P 500.
AstraZeneca Stock Performance
Image Source: Zacks Investment Research
AstraZeneca boasts a diversified geographical footprint as well as product portfolio with several blockbuster medicines. AstraZeneca now has 12 blockbuster medicines in its portfolio with sales exceeding $1 billion, including Tagrisso, Fasenra, Farxiga, Imfinzi, Lynparza, Soliris and Ultomiris. These drugs are driving the company’s top line with AstraZeneca launching them in more markets and in an increased number of indications. Almost every new product it has launched in recent years has done well. It has a huge pipeline and AstraZeneca has also been engaged in external acquisitions and strategic collaborations to boost its pipeline.
Let us dig deeper to understand what's driving AstraZeneca’s stock.
Strong Position in Oncology Space
Oncology is AstraZeneca’s biggest segment. AstraZeneca is working on strengthening its oncology product portfolio through label expansions of existing products and progressing oncology pipeline candidates. Oncology sales now comprise around 40% of AstraZeneca‘s total revenues and rose 17% in 2021, 19% in 2022 and 21% in 2023. The strong oncology performance was driven by medicines such as Tagrisso, Lynparza Imfinzi, Calquence and Enhertu (in partnership with Daiichi Sankyo). AstraZeneca is looking for further label expansion of all these drugs. A key new cancer drug approval was Truqap for HR-positive, HER2-negative (HR+ HER2-) breast cancer. It also has some important oncology candidates in its pipeline, including datopotamab deruxtecan in partnership with Daichii Sankyo which is under review in the United States for non-squamous non-small cell lung cancer and HR+ HER2- breast cancer.
Non-Cancer Pipeline Progress
AstraZeneca has been making significant progress with its pipeline in other areas like cardiovascular health, immunology and rare diseases. Some key new drug approvals are Voydeya to treat extravascular hemolysis in adults with the rare disease paroxysmal nocturnal hemoglobinuria (PNH), Wainua (in partnership with Ionis [(IONS - Free Report) ]) for hereditary transthyretin-mediated amyloidosis, commonly referred to as ATTRv-PN and respiratory syncytial virus (“RSV”) antibody Beyfortus (in partnership with Sanofi [(SNY - Free Report) ]). A key pipeline candidate is ALXN-2220 being developed for transthyretin amyloid cardiomyopathy.
AstraZeneca is investing in disruptive innovation and transformative new technologies and platforms to discover novel medicines. The company is exploring modalities such as cell, gene and RNA therapies, epigenetics and oligonucleotides to identify new treatment approaches.
Attractive Valuation & Rising Estimates
From a valuation standpoint, AstraZeneca appears attractive relative to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 18.15 forward earnings, lower than 20.58 for the industry. The shares are also trading below their 5-year average mean of 18.72. The stock is also significantly cheaper than rivals Eli Lilly and Novo Nordisk.
AZN Stock Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2024 earnings has risen from $4.04 per share to $4.05 per share over the past 60 days. For 2025, earnings estimates have risen from $4.67 to $4.69 per share over the same timeframe.
AZN Estimate Movement
Image Source: Zacks Investment Research
Conclusion
AstraZeneca has its share of problems. AstraZeneca’s diabetes franchise faces stiff competition while the respiratory unit is being hurt by pricing pressure.
However, the company is confident of seeing sustained growth for several years, driven by sales growth of its key medicines, Tagrisso, Imfinzi, Lynparza, Ultomiris, Farxiga and Fasenra. Royalties and profit share from partnered medicines is a key contributor to AstraZeneca’s revenues and profits.
Backed by its new products and pipeline drugs, AstraZeneca believes it can post industry-leading top-line growth in the 2025-2030 period. AstraZeneca expects to generate $80 billion in total revenues by 2030. By the said time frame, AstraZeneca plans to launch 20 new medicines. It believes that many of these new medicines will have the potential to generate more than $5 billion in peak-year revenues.
AstraZeneca’s stock has shrugged off its 2023 underperformance by rising decently this year. The stock has been trading above its 200-day moving average since the end of March. It has an attractive dividend yield of around 4%.
Investors who own AstraZeneca’s stock may stay invested as the company has potential to generate consistent profits. Buying the stock of this fundamentally strong company at its present reasonable valuation can prove prudent for long-term investors who are interested in buying blue-chip companies.
Image: Bigstock
AstraZeneca (AZN) Stock Rises 18% YTD: Should You Buy?
AstraZeneca’s (AZN - Free Report) stock has risen 18.4% so far this year, underperforming an increase of 23.4% for the industry, as seen in the chart below. AstraZeneca’s stock has, however, outperformed the sector as well as the S&P 500.
AstraZeneca Stock Performance
AstraZeneca boasts a diversified geographical footprint as well as product portfolio with several blockbuster medicines. AstraZeneca now has 12 blockbuster medicines in its portfolio with sales exceeding $1 billion, including Tagrisso, Fasenra, Farxiga, Imfinzi, Lynparza, Soliris and Ultomiris. These drugs are driving the company’s top line with AstraZeneca launching them in more markets and in an increased number of indications. Almost every new product it has launched in recent years has done well. It has a huge pipeline and AstraZeneca has also been engaged in external acquisitions and strategic collaborations to boost its pipeline.
Let us dig deeper to understand what's driving AstraZeneca’s stock.
Strong Position in Oncology Space
Oncology is AstraZeneca’s biggest segment. AstraZeneca is working on strengthening its oncology product portfolio through label expansions of existing products and progressing oncology pipeline candidates. Oncology sales now comprise around 40% of AstraZeneca‘s total revenues and rose 17% in 2021, 19% in 2022 and 21% in 2023. The strong oncology performance was driven by medicines such as Tagrisso, Lynparza Imfinzi, Calquence and Enhertu (in partnership with Daiichi Sankyo). AstraZeneca is looking for further label expansion of all these drugs. A key new cancer drug approval was Truqap for HR-positive, HER2-negative (HR+ HER2-) breast cancer. It also has some important oncology candidates in its pipeline, including datopotamab deruxtecan in partnership with Daichii Sankyo which is under review in the United States for non-squamous non-small cell lung cancer and HR+ HER2- breast cancer.
Non-Cancer Pipeline Progress
AstraZeneca has been making significant progress with its pipeline in other areas like cardiovascular health, immunology and rare diseases. Some key new drug approvals are Voydeya to treat extravascular hemolysis in adults with the rare disease paroxysmal nocturnal hemoglobinuria (PNH), Wainua (in partnership with Ionis [(IONS - Free Report) ]) for hereditary transthyretin-mediated amyloidosis, commonly referred to as ATTRv-PN and respiratory syncytial virus (“RSV”) antibody Beyfortus (in partnership with Sanofi [(SNY - Free Report) ]). A key pipeline candidate is ALXN-2220 being developed for transthyretin amyloid cardiomyopathy.
AstraZeneca is investing in disruptive innovation and transformative new technologies and platforms to discover novel medicines. The company is exploring modalities such as cell, gene and RNA therapies, epigenetics and oligonucleotides to identify new treatment approaches.
Attractive Valuation & Rising Estimates
From a valuation standpoint, AstraZeneca appears attractive relative to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 18.15 forward earnings, lower than 20.58 for the industry. The shares are also trading below their 5-year average mean of 18.72. The stock is also significantly cheaper than rivals Eli Lilly and Novo Nordisk.
AZN Stock Valuation
The Zacks Consensus Estimate for 2024 earnings has risen from $4.04 per share to $4.05 per share over the past 60 days. For 2025, earnings estimates have risen from $4.67 to $4.69 per share over the same timeframe.
AZN Estimate Movement
Conclusion
AstraZeneca has its share of problems. AstraZeneca’s diabetes franchise faces stiff competition while the respiratory unit is being hurt by pricing pressure.
However, the company is confident of seeing sustained growth for several years, driven by sales growth of its key medicines, Tagrisso, Imfinzi, Lynparza, Ultomiris, Farxiga and Fasenra. Royalties and profit share from partnered medicines is a key contributor to AstraZeneca’s revenues and profits.
Backed by its new products and pipeline drugs, AstraZeneca believes it can post industry-leading top-line growth in the 2025-2030 period. AstraZeneca expects to generate $80 billion in total revenues by 2030. By the said time frame, AstraZeneca plans to launch 20 new medicines. It believes that many of these new medicines will have the potential to generate more than $5 billion in peak-year revenues.
AstraZeneca’s stock has shrugged off its 2023 underperformance by rising decently this year. The stock has been trading above its 200-day moving average since the end of March. It has an attractive dividend yield of around 4%.
Investors who own AstraZeneca’s stock may stay invested as the company has potential to generate consistent profits. Buying the stock of this fundamentally strong company at its present reasonable valuation can prove prudent for long-term investors who are interested in buying blue-chip companies.
AstraZeneca has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.