UBS raises AstraZeneca stock rating to buy, hikes target

On Thursday, AstraZeneca (NASDAQ:AZN) stock received a positive assessment from UBS, as analyst Matthew Weston upgraded the pharmaceutical giant’s rating from Neutral to Buy. The upgrade was accompanied by a significant increase in the price target, setting it at GBP142.00, up from the previous GBP115.00. The company, currently valued at $228 billion, has shown impressive momentum with a 24.5% return over the past year. According to InvestingPro analysis, AstraZeneca appears to be trading above its Fair Value, with analysts setting price targets between $67 and $97.

Weston’s upbeat outlook for AstraZeneca is rooted in the company’s strong standing within the global Major Pharma sector, where it ranks second based on UBS’s evaluation of six strategic parameters and net present value (NPV) valuation. AstraZeneca has been recognized for its product uniqueness, which is expected to be resistant to rebate pressures, robust sales growth projections up to the year 2029, and a marketing burden that favors a revenue mix leaning towards specialty care. InvestingPro data reveals the company’s solid fundamentals, with an impressive 82% gross profit margin and a "GREAT" overall financial health score, supporting its position as a prominent player in the pharmaceutical industry.

UBS’s forecasts for AstraZeneca are based on an anticipated compound annual growth rate (CAGR) of 6% in revenue from 2024 to 2030, which would elevate total revenue to $74.4 billion. Additionally, the firm’s rich late-stage pipeline is projected to potentially contribute an extra $17.6 billion to sales by 2030, assuming successful outcomes. However, Weston notes that while some studies may not succeed, the year 2025 stands out as a pivotal year with expected data on seven high-value new drugs and significant line extensions.

The diversified catalyst path for AstraZeneca is a point of interest for UBS, as the company’s prospects are no longer solely dependent on the performance of Dato-DXd. This broadened approach to growth and development is a key factor in the firm’s positive rating and enhanced price target for AstraZeneca shares.

In other recent news, AstraZeneca has been the subject of several noteworthy developments. BofA Securities reiterated its Buy rating on AstraZeneca, maintaining a price target of GBP145.00. The firm’s stance is influenced by the company’s valuation and the potential for significant developments in the next 18 months, with multiple pivotal trial results anticipated.

Morgan Stanley (NYSE:MS) also showed confidence in AstraZeneca, assigning an Overweight rating and a price target of GBP145.00. The firm’s projections indicate growth in the company’s revenues and earnings per share. Goldman Sachs, while reducing its price target on AstraZeneca to GBP150.67, reaffirmed a Buy rating, citing a robust pipeline of products and manageable challenges in the China market.

In terms of product development, AstraZeneca’s drug Imfinzi received a recommendation for approval from the European Medicines Agency for treatment of limited-stage small cell lung cancer. The company’s drug Enhertu also gained FDA approval for the treatment of certain types of breast cancer, marking a significant expansion in treatment options.

These recent developments highlight the strides AstraZeneca is making in its product pipeline and the confidence of major financial firms in the company’s future performance.

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