30th Jul 2015 11:38
LONDON (Alliance News) - Analysts have responded positive to AstraZeneca's first half results, after the pharmaceutical giant upgraded its revenue forecast for the year, with Shore, Liberum, Berenberg and Societe Generale all reiterating their Buy ratings for the stock.
AstraZeneca's results beat consensus forecasts on product sales and core earnings per share, Berenberg notes. The product sales beat in particular is pleasing as the company's diabetes franchise put in a good performance, and this franchise has disappointed over recent quarters.
It did note that a significant portion of the beat came from US sales of acid reflux medication Nexium, and as this product is subject to generic competition, this is non-recurring benefit.
Berenberg has a price target of 5,200 pence. Shares in AstraZeneca are up 3.0% at 4,318.00 pence Thursday.
Liberum also notes the better-than-expected performance from Nexium and the diabetes portfolio in general as the reason for the revenue guidance raise, although it highlighted Type-2 diabetes drug Forxiga as the standout performer, which beat consensus expectations by 40%.
Liberum has a price target of 5,800 pence.
SocGen noted that the company's core earnings per share beat was driven by a better top line, augmented by a much lower tax rate. That the company did not upgrade its earnings per share guidance alongside its revenue guidance is unsuprising, SocGen says, as the company has stated its intention to maximise investment in its pipeline.
SocGen has a price target of 6,600 pence.
Shore says the investment case for AstraZeneca has "little to do" with its second quarter performance, however, and more to do with its product development pipeline. "It's probably fair to say that the mature product portfolio did a bit better than we anticipated," Shore says.
"The challenges facing Astra in 2015/16 are well understood we believe and already reflected in consensus numbers. Of more importance, we believe, is the evolution of the competitive landscape in the evolving field of immuno oncology," Shore says.
It believes that AstraZeneca is well placed to compete in this area. It has a price target of 4,190 pence.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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