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Should AstraZeneca Stock Be in Your Portfolio Pre-Q4 Earnings?
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AstraZeneca (AZN - Free Report) will report its fourth-quarter and full-year 2024 earnings on Feb. 6, before market open. The Zacks Consensus Estimate for sales and earnings is pegged at $14.28 billion and $1.06 per share, respectively. Earnings estimates for AstraZeneca have declined from $4.69 per share to $4.66 per share for 2025 over the past 30 days.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
AZN Estimate Movement
Image Source: Zacks Investment Research
Earnings Surprise History for AZN
The healthcare bellwether’s performance has been mixed, with the company exceeding earnings expectations in three of the trailing four quarters while missing in one. It delivered a four-quarter earnings surprise of 3.29%, on average. In the last reported quarter, the company delivered an earnings surprise of 2.97%.
Image Source: Zacks Investment Research
What Does Our Model Say for AZN?
AstraZeneca has an Earnings ESP of -2.84% and a Zacks Rank #3 (Hold). Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Sales Estimates for Tagrisso, Lynparza & Other Key Drugs
Sales of AstraZeneca’s key medicines, mainly cancer drugs — Lynparza, Tagrisso and Imfinzi — and diabetes medicine Farxiga are expected to have driven the company’s top line in the fourth quarter, backed by strong demand trends.
AstraZeneca’s other drugs, Fasenra, Calquence, Breztri and newer products, asthma drug Tezspire, breast cancer drug Truqap and lupus drug Saphnelo (anifrolumab) are likely to have contributed to sales growth in the soon-to-be-reported quarter. Sales of Truqap and Saphnelo improved sequentially in the third quarter, a trend likely to have continued in the fourth quarter.
The Zacks Consensus Estimate for Lynparza, Tagrisso and Imfinzi are $792 million, $1.68 billion and $1.29 billion, respectively.
Our model estimates for Lynparza, Tagrisso and Imfinzi are $789.0 million, $1.62 billion and $1.29 billion, respectively.
The Zacks Consensus Estimate for Fasenra and Farxiga is $437 million and $1.96 billion, respectively.
Our model estimates for Fasenra and Farxiga are $435.9 million and $1.96 billion, respectively.
How Will AZN’s New and Legacy Drugs Perform?
Investors will be keen to know the sales number of AstraZeneca’s new products Airsupra (asthma), Voydeya (paroxysmal nocturnal hemoglobinuria) and Wainua (ATTRv-PN) as well as AstraZeneca and partner Sanofi’s (SNY - Free Report) respiratory syncytial virus (“RSV”) antibody Beyfortus (nirsevimab).
AstraZeneca records 50% share of gross profits on sales of Beyfortus in major markets outside the United States received from Sanofi as Alliance revenues. It also records Beyfortus product sales from products supplied to partner Sanofi under the Vaccines & Immune Therapies segment.
Like the previous two quarters, sales of key respiratory medicine Symbicort are expected to have risen in the fourth quarter due to strong underlying demand in the United States and Emerging markets, which are likely to have offset the impact of generic erosion in Europe and Japan.
The Zacks Consensus Estimates for Symbicort is $639 million, while our model estimate is $615.9 million.
Sales of AstraZeneca’s major legacy drugs have been declining due to rising generic competition. The trend is likely to have continued in the fourth quarter.
Sales of AstraZeneca’s Rare Disease drugs like Ultomiris and Strensiq are expected to have been strong and contributed to the top line. Sales of Soliris are likely to have declined due to conversion to Ultomiris.
AZN’s Alliance Revenues & Costs
Alliance revenues are expected to have been an important contributor to the top line, driven by continued growth in royalties and profit share from partnered medicines.
AstraZeneca’s SG&A costs are expected to have been higher in the fourth quarter due to increased investment in launches for new products Airsupra, Wainua and Truqap. R&D costs are expected to have increased due to investment in the pipeline.
On the third-quarter conference call, management issued a preliminary outlook for 2025. The company said it expects top-line growth of around 20% in 2025. The company also mentioned that sales of Farxiga are expected to decline substantially in 2025 as the drug will be included in China's Volume-based Procurement (VBP) program in 2025. The company also said that the percentage of revenues the company derives from China is expected to decline over time from the present around 12-13% due to higher growth in ex-China markets. An update is expected on the fourth-quarter conference call.
An update on the ongoing investigation at its China subsidiary is also expected. The Chinese authorities are investigating some current and former AstraZeneca employees at its China subsidiary for medical insurance fraud, illegal drug importation and personal information breaches.
Nonetheless, a single quarter’s results are not so important for long-term investors. Let us delve deeper to understand whether to buy, sell or hold AstraZeneca stock.
AZN Stock’s Price, Valuation & Estimates
AstraZeneca’s stock has risen 3.5% in the past year, outperforming an increase of 0.2% for the industry.
AstraZeneca Stock Underperforms Industry
Image Source: Zacks Investment Research
From a valuation standpoint, AstraZeneca appears attractive relative to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 14.81 forward earnings, lower than 16.44 for the industry as well as its 5-year mean of 18.30. The stock is cheaper than that of other large drugmakers like Lilly (LLY - Free Report) and Novo Nordisk (NVO - Free Report) .
AZN Stock Valuation
Image Source: Zacks Investment Research
Our Investment Thesis on AZN Stock
AstraZeneca boasts a diversified geographical footprint as well as a 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 backed by increasing demand trends. The company is confident that the growth will continue in 2025.
Oncology is AstraZeneca’s biggest segment. The company is working on strengthening its oncology product portfolio through label expansions of existing products and progressing oncology pipeline candidates. AstraZeneca has been making significant progress with its pipeline in other areas like cardiovascular health, immunology and rare diseases.
AstraZeneca has its share of problems like potentially lower sales of Farxiga in 2025 and ongoing China investigations. However, the company is confident of continued growth momentum in the Oncology, Rare Disease and CVRM segments in 2025.
Backed by its new products and pipeline drugs, AstraZeneca believes it can post industry-leading top-line growth in the 2025-2030 period. The company is also on target to achieve a mid-30s percentage core operating margin by 2026.
Stay Invested in AZN Stock
No matter how the fourth-quarter results play out, we suggest those who own AstraZeneca’s stock stay invested as the company shows 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.
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Should AstraZeneca Stock Be in Your Portfolio Pre-Q4 Earnings?
AstraZeneca (AZN - Free Report) will report its fourth-quarter and full-year 2024 earnings on Feb. 6, before market open. The Zacks Consensus Estimate for sales and earnings is pegged at $14.28 billion and $1.06 per share, respectively. Earnings estimates for AstraZeneca have declined from $4.69 per share to $4.66 per share for 2025 over the past 30 days.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
AZN Estimate Movement
Earnings Surprise History for AZN
The healthcare bellwether’s performance has been mixed, with the company exceeding earnings expectations in three of the trailing four quarters while missing in one. It delivered a four-quarter earnings surprise of 3.29%, on average. In the last reported quarter, the company delivered an earnings surprise of 2.97%.
What Does Our Model Say for AZN?
AstraZeneca has an Earnings ESP of -2.84% and a Zacks Rank #3 (Hold). Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Sales Estimates for Tagrisso, Lynparza & Other Key Drugs
Sales of AstraZeneca’s key medicines, mainly cancer drugs — Lynparza, Tagrisso and Imfinzi — and diabetes medicine Farxiga are expected to have driven the company’s top line in the fourth quarter, backed by strong demand trends.
AstraZeneca’s other drugs, Fasenra, Calquence, Breztri and newer products, asthma drug Tezspire, breast cancer drug Truqap and lupus drug Saphnelo (anifrolumab) are likely to have contributed to sales growth in the soon-to-be-reported quarter. Sales of Truqap and Saphnelo improved sequentially in the third quarter, a trend likely to have continued in the fourth quarter.
The Zacks Consensus Estimate for Lynparza, Tagrisso and Imfinzi are $792 million, $1.68 billion and $1.29 billion, respectively.
Our model estimates for Lynparza, Tagrisso and Imfinzi are $789.0 million, $1.62 billion and $1.29 billion, respectively.
The Zacks Consensus Estimate for Fasenra and Farxiga is $437 million and $1.96 billion, respectively.
Our model estimates for Fasenra and Farxiga are $435.9 million and $1.96 billion, respectively.
How Will AZN’s New and Legacy Drugs Perform?
Investors will be keen to know the sales number of AstraZeneca’s new products Airsupra (asthma), Voydeya (paroxysmal nocturnal hemoglobinuria) and Wainua (ATTRv-PN) as well as AstraZeneca and partner Sanofi’s (SNY - Free Report) respiratory syncytial virus (“RSV”) antibody Beyfortus (nirsevimab).
AstraZeneca records 50% share of gross profits on sales of Beyfortus in major markets outside the United States received from Sanofi as Alliance revenues. It also records Beyfortus product sales from products supplied to partner Sanofi under the Vaccines & Immune Therapies segment.
Like the previous two quarters, sales of key respiratory medicine Symbicort are expected to have risen in the fourth quarter due to strong underlying demand in the United States and Emerging markets, which are likely to have offset the impact of generic erosion in Europe and Japan.
The Zacks Consensus Estimates for Symbicort is $639 million, while our model estimate is $615.9 million.
Sales of AstraZeneca’s major legacy drugs have been declining due to rising generic competition. The trend is likely to have continued in the fourth quarter.
Sales of AstraZeneca’s Rare Disease drugs like Ultomiris and Strensiq are expected to have been strong and contributed to the top line. Sales of Soliris are likely to have declined due to conversion to Ultomiris.
AZN’s Alliance Revenues & Costs
Alliance revenues are expected to have been an important contributor to the top line, driven by continued growth in royalties and profit share from partnered medicines.
AstraZeneca’s SG&A costs are expected to have been higher in the fourth quarter due to increased investment in launches for new products Airsupra, Wainua and Truqap. R&D costs are expected to have increased due to investment in the pipeline.
On the third-quarter conference call, management issued a preliminary outlook for 2025. The company said it expects top-line growth of around 20% in 2025. The company also mentioned that sales of Farxiga are expected to decline substantially in 2025 as the drug will be included in China's Volume-based Procurement (VBP) program in 2025. The company also said that the percentage of revenues the company derives from China is expected to decline over time from the present around 12-13% due to higher growth in ex-China markets. An update is expected on the fourth-quarter conference call.
An update on the ongoing investigation at its China subsidiary is also expected. The Chinese authorities are investigating some current and former AstraZeneca employees at its China subsidiary for medical insurance fraud, illegal drug importation and personal information breaches.
Nonetheless, a single quarter’s results are not so important for long-term investors. Let us delve deeper to understand whether to buy, sell or hold AstraZeneca stock.
AZN Stock’s Price, Valuation & Estimates
AstraZeneca’s stock has risen 3.5% in the past year, outperforming an increase of 0.2% for the industry.
AstraZeneca Stock Underperforms Industry
Image Source: Zacks Investment Research
From a valuation standpoint, AstraZeneca appears attractive relative to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 14.81 forward earnings, lower than 16.44 for the industry as well as its 5-year mean of 18.30. The stock is cheaper than that of other large drugmakers like Lilly (LLY - Free Report) and Novo Nordisk (NVO - Free Report) .
AZN Stock Valuation
Our Investment Thesis on AZN Stock
AstraZeneca boasts a diversified geographical footprint as well as a 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 backed by increasing demand trends. The company is confident that the growth will continue in 2025.
Oncology is AstraZeneca’s biggest segment. The company is working on strengthening its oncology product portfolio through label expansions of existing products and progressing oncology pipeline candidates. AstraZeneca has been making significant progress with its pipeline in other areas like cardiovascular health, immunology and rare diseases.
AstraZeneca has its share of problems like potentially lower sales of Farxiga in 2025 and ongoing China investigations. However, the company is confident of continued growth momentum in the Oncology, Rare Disease and CVRM segments in 2025.
Backed by its new products and pipeline drugs, AstraZeneca believes it can post industry-leading top-line growth in the 2025-2030 period. The company is also on target to achieve a mid-30s percentage core operating margin by 2026.
Stay Invested in AZN Stock
No matter how the fourth-quarter results play out, we suggest those who own AstraZeneca’s stock stay invested as the company shows 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.