Liberum upgrades AstraZeneca to 'buy' from 'hold'
Liberum upgraded AstraZeneca to ‘buy’ from ‘hold’.
AstraZeneca
11,584.00p
17:15 23/09/24
FTSE 100
8,259.71
16:59 23/09/24
FTSE 350
4,558.45
16:49 23/09/24
FTSE All-Share
4,515.00
17:04 23/09/24
Pharmaceuticals & Biotechnology
22,174.81
16:49 23/09/24
The brokerage had harboured concerns about the risks to the company’s global Phase 3 study of durvalumab, MYSTIC, earnings weakness and bid speculation unwinding.
However, with the stock down around 20% and at lows not seen since late 2013 in US dollar terms, Liberum said it “can’t ignore that the risk/reward going into a rich seam of catalysts is now strongly to the upside”.
“We believe the current valuation is effectively assuming zero from the high potential immune-oncology programme,” it said.
The brokerage reckons the shares are worth up to 6,000-6,400p in the of durva-treme success in the key Phase 3 studies reporting through 2017. If they fail, there would likely be short term downside, but there is fundamental value in the 4,500p range.
Even without durva-treme, Liberum thinks earnings growth of around 9% per year between 2017 and 2021 is achievable.
“If lower risk Tagrisso and Lynparza come through, 12% is more likely. We think this level of growth more than justifies upside to the current share price and is supportive of a range around £45-48/share (7-14% upside) ex-durva-treme.”
Liberum has a 5,200p price target on the stock.
At 0920 GMT, the shares were up 0.8% to 4,244p.