Jefferies cuts AstraZeneca target price

The broker cut its target from 4,900p to 4,400p, telling clients it continued to believe it was "highly unlikely" that either the company's mono or combo arms for Imfinzi would meet statistical significance as compared to chemotherapy on rates of progression-free-survival.

There also continued to be "limited visibility" on the firm's core earnings per share, with 'one-off' externalisation and OOI contributions still driving roughly between 20% and 40% of the broker's estimates for operating profits in the next few years.

In April 2017, Jefferies downgraded the stock, due to its concerns around MYSTIC and the company's "uncomfortable" level of dependence on asset sales and outlicensing in order to prop up its ongoing operations and dividend payout.

Furthermore, Astra's deal with Merck to develop and market its Lynparza treatment for multiple types of cancer would hit the company's profitability.

On the upside, its PACIFIC and FLAURA trials for Imfinzi and Tagrisso should drive strong franchises, according to the broker.

To take note of, Jefferies also estimated that Astra's dividend was unlikely to be covered by underlying free cash flows until 2021.

Jefferies said it preferred GlaxoSmithKline for yield and Bristol-Myers Squibb as an immuno-oncology play.

Novartis and Eli Lilly were best as lower-risk EPS plays, the broker added.

The analysts kept their recommendation on AstraZeneca shares at a 'hold'.

"We remain concerned over the overall shape of the company's earnings and cash flows. Furthermore, we find valuation and forecasting very difficult on this name."