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On Friday, Guggenheim adjusted its price target on shares of AstraZeneca (NASDAQ:AZN:LN) (NASDAQ: AZN), increasing it to GBP13,100 from the previous target of GBP12,600. The firm reiterated its Buy rating on the pharmaceutical giant's stock, which currently commands a market capitalization of $207.9 billion and has maintained dividend payments for 32 consecutive years.
According to InvestingPro analysis, AstraZeneca appears undervalued based on its Fair Value calculation. The decision comes amid anticipation of various developments that could impact AstraZeneca's performance, including ongoing investigations in China and upcoming drug trial readouts.
According to Guggenheim's analysis, the China investigations might lead to an impact on AstraZeneca's fourth quarter 2024 results, which could extend into 2025. This is partly due to an expected reduction in promotional activities following the investigation. Moreover, the company is preparing for the next round of negotiations related to the Inflation Reduction Act, with the Centers for Medicare & Medicaid Services (CMS) expected to release the drug list by February 1, 2025.
AstraZeneca has shifted its focus towards the AVANZAR trials, with results anticipated in the second half of 2025. The trials have been amended to evaluate progression-free survival (PFS) and overall survival (OS) in both non-squamous biomarker-positive and intention-to-treat populations. These developments are particularly significant for the company's oncology business.
The firm also highlighted that AstraZeneca expects Enhertu, Tagrisso, and Imfinzi to be the main growth drivers for its oncology portfolio throughout the year. While the company has maintained its operating margin ambitions as stated during the Investor Day in May, it noted that the guidance was based on constant currency rates. Therefore, a strengthening dollar could pose a slight headwind to the margins.
AstraZeneca's management remains committed to the growth potential outlined for 2025, despite the potential challenges on the horizon. The company's strategic focus and upcoming trial readouts are key areas of interest for investors as they evaluate the firm's future prospects. InvestingPro subscribers can access 8 additional exclusive insights and a comprehensive Pro Research Report that provides deep-dive analysis of AstraZeneca's financial health, which currently rates as "GREAT" with an overall score of 3.43 out of 5.
In other recent news, AstraZeneca's drug Calquence received U.S. Food and Drug Administration (FDA) approval for the treatment of adult patients with previously untreated mantle cell lymphoma (MCL). The approval followed the ECHO Phase III trial, which demonstrated significant improvement in progression-free survival.
The company, alongside Daiichi Sankyo, withdrew their application for marketing authorization in the European Union for their lung cancer drug, datopotamab deruxtecan, but remain committed to its development. Meanwhile, TD Cowen's analysis indicates that large-cap pharma companies like AstraZeneca are well-positioned to mitigate risks from U.S. tariffs and geopolitical tensions.
These are part of the recent developments surrounding AstraZeneca, which also reported its total voting rights as of December 31, an essential disclosure for shareholders. AstraZeneca's Calquence is also under review by regulatory authorities in multiple countries based on the ECHO trial results.
Furthermore, the company's oncology medication, Tagrisso, received approval from the European Union for the treatment of a specific type of lung cancer. In terms of financial performance, AstraZeneca reported a revenue growth of 13.81% in the last twelve months, indicating a robust position to leverage Calquence's market potential.
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