Morgan Stanley sees huge upside at AstraZeneca

Morgan Stanley has initiated coverage of pharma giant AstraZeneca with an 'overweight' rating, recommending investors to build positions at a "compelling entry point".

The bank hailed AstraZeneca as an "innovation leader", saying that the company has an underappreciated pipeline with exposure to high-value markets across oncology, cardiovascular/renal and next-generation immuno-oncology.

"With pivotal clinical data starting in 2025+, success across these markets, could start to unlock value closer to our bull case valuation, £160/share," Morgan Stanley said. That compares with Tuesday's closing price of 11,624p.

As for the near term, 2025 should be a "catalyst-rich year", delivering double-digit bottom-line growth alongside continued strong product sales momentum, the bank said.

On Morgan Stanley's estimates, the stock trades at 15 times estimated earnings for 2025. While this is a 30% premium to other large-cap pharma peers, it is "justifiable given the superior top-line driven growth outlook [...] and significantly greater pipeline optionality," the bank said.

For now, Morgan Stanley has set a 14,500p target price for the shares, which were down 0.2% at 11,606p by 1054 GMT.