Hargreaves Lansdown argues that while AstraZeneca’s (LON:AZN) third quarter results may not look pretty, the pharma giant is in decent health, Citywire reports. The comments came after the blue-chip drugmaker reported yesterday that its revenue had fallen in the third quarter of the year. The company’s sales, however, rose during the reported period, with the group noting that its new medicines were “firmly established as the drivers of growth”.
AstraZeneca’s share price, which rose in the previous session as investors digested the update, has built on gains in today’s trading, having added 0.41 percent higher to 6,118.00p as of 09:52 GMT. The shares are outperforming the broader UK market, with the benchmark FTSE 100 index having fallen into the red and currently standing 0.57 percent lower at 7,099.74 points.
AstraZeneca ‘far from sickly’
Despite the drop in AstraZeneca’s third-quarter revenue, Citywire quoted Hargreaves Lansdown analyst Nicholas Hyett as commenting yesterday that ‘scratch the surface and Astra is far from sickly’.
“Its new drugs are flying off the pharmacy shelves, particularly in oncology where failure of the [lung cancer] trial last year is a distant memory,” Hyett elaborated, adding that making and selling drugs was more expensive than simply selling drugs to rivals, which was pushing up the debt pile but the balance sheet ‘isn’t in need of emergency surgery’.
“Astra still needs to get debt back under control before it can start growing returns to shareholders,” the analyst concluded.
Other analysts on pharmco
Barclays, which is bullish on AstraZeneca with a ‘buy’ rating, set a price target of 6,800p on the stock today, while Goldman Sachs, which rates the pharmco as a ‘sell,’ set a valuation of 4,080p yesterday. According to MarketBeat, the Anglo-Swedish drugmaker currently has a consensus ‘hold’ rating and an average price target of 5,804.11p.