JP Morgan restarts AstraZeneca at overweight, sees re-rating opportunity

Analysts at JP Morgan resumed their coverage of AstraZeneca at 'overweight', telling clients they saw a "re-rating opportunity".

Indeed, with approximately 20% upside now on offer, JP Morgan also named the shares its UK large-cap top-pick.

The company's share price, with an implied core price-to-earnings multiple of 15.5 and 13.5 times' for 2022 and 2023, was failing to reflect the company's superior growth outlook.

"We see Astra's sector discount unwinding, as the Alexion acquisition demonstrates continued strong top-line growth, coupled with significant operating margin expansion and increased free cash flow generation," they added.

That was on top of a "number" of upcoming pipeline catalysts that the broker said could drive long-term upgrades and multiple expansion.

On their 10,000.0p target price, Astra would merely re-rate to a 2023 sector multiple, JP Morgan said.

Among those potential catalysts were phase III data from Lynparza's PROpel front line Prostate cancer trial, ALXN1840 for Wilson's disease and phase III data for Enhertu DESTINY-04 for HER2 intermediate/low breast cancer.

The former two dats sets were expected in the back half of 2021 and the latter in the front half of 2022.