Shares in AstraZeneca (LON:AZN) have fallen deep into the red in today’s session as analysts at BMO Capital Markets trimmed their earnings forecasts for the blue-chip drugmaker. The move comes ahead of the pharmco’s third-quarter update on November 8.
As of 14:11 BST, AstraZeneca’s share price had given up 4.87 percent to 5,642.00p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.38 percent lower at 6,936.84 points. The group’s shares have added more than 11 percent to their value over the past year, as compared with about a 6.8-percent dip in the Footsie.
BMO flags ‘messy’ results
The Financial Times reported today that BMO Capital Markets had cut earnings forecasts for AstraZeneca ahead of the pharmco’s upcoming results. The broker has further flagged ‘messy’ results, with the consensus having not yet factored in the hit to earnings from externalisation, which has seen the Anglo-Swedish generate revenue by selling the rights to medicines in return for upfront fees and milestone payments.
While the broker forecasts that AstraZeneca’s key profit sales will match market expectations, it flagged revenue and earnings per share five percent and 32 percent lower than the consensus, respectively. BMO, however, nevertheless continues to see the blue-chip drugmaker as an ‘outperform’.
“We believe the market will likely see past the externalisation revenue noise and focus on product sales and growth prospects from oncology and other late-stage assets,” the analysts pointed out, as quoted by the FT.
Analyst ratings update
Credit Suisse Group reaffirmed AstraZeneca as an ‘outperform’ this week, without specifying a valuation on the shares. According to MarketBeat, the Anglo-Swedish drugmaker currently boasts a consensus ‘buy’ rating and an average price target of 5,777.58p.
AstraZeneca moved to strengthen its position in the immuno-oncology field this week, expanding its collaboration with French biotech company Innate Pharma.