Opinions
The Panic-Proof Portfolio (Stockchase Research)
Astrazeneca P L C
AZN-N
PAST TOP PICK
Mar 13, 2025
Stock price when the opinion was issued
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Is overlooked in pharma. It boasts an amazing oncology business, including recent positive trial data on phase 2 and 3 lung cancer drugs, which could be breakthroughs. Shares have doubled in the last 5 years and has been climbing since 2016. Last April they delivered a blowout quarter with an earnings beat and a bullish forecast including a 8.5% compound annual growth rate based on doubling multi-billion drugs to 25 by 2030. Also, they are developing obesity drugs.
Very strong R&D pipeline, with new products expected. Off recent share price highs, which is a good time to buy. Margins very strong on new products. Expecting earnings to rise in the immediate future. Low double digit EPS @ 16x earnings a very strong value proposition. Will continue to hold for the long term.
The big pharma is developing a GLP-1 weight loss treatment that avoids injections -- a big game changer - and trials are looking good. The stock trades at 32x earnings and supports a 16% ROE. We recommend setting a stop-loss at $52, looking to achieve $88 -- upside potential of 30%. Yield 2.2%
(Analysts’ price target is $88.01)We reiterate AZN as a TOP PICK. Recently reported earnings indicated a 19% increase in earnings and revenues. Management announced positive development on 9 new drugs worth $5 billion in future revenues and a plan to invest over $800 million in Ontario creating 700 jobs. The shares trade at 18x earnings and support a 30% ROE. We recommend trailing up the stop (from $52) to $64, looking to achieve $88 -- upside potential of 21%. Yield 1.4%
(Analysts’ price target is $88.24)They rallied last summer, then faced headwinds last fall when a cancer drug failed to perform in trials and there was an investigation in their large Chinese business. Both problems are clearing now. They have a drug pipeline that should become a great growth story. Trades at 15x PE.
Our PAST TOP PICK with AZN has triggered its stop at $71. To remain disciplined, we recommend covering the position at this time. This will result in a net investment gain of 1%, when combined with our previous guidance.
Our PAST TOP PICK with AZN is progressing well. To remain disciplined, we recommend trailing up the stop (from $64) to $71 at this time.