Trump win gives AstraZeneca share price boost ahead of Q3 results

on Nov 9, 2016
Updated: Mar 11, 2020

Shares in AstraZeneca (LON:AZN) have been in demand today, following Donald Trump’s victory in the race for the White House. The rise comes ahead of the group’s third-quarter results tomorrow, when the blue-chip pharmco is expected to post a modest rise in sales. The company, however, is continuing to battle with competition from cheaper generics on some of its top-selling drugs.

As of 14:30 GMT, AstraZeneca’s share price had gained 2.98 percent to 4,583.00p, as compared with a 0.57-percent rise in the blue-chip FTSE 100 index. The stock has advanced alongside other London-listed pharmaceuticals, following Donald Trump’s win in the US presidential election, with Hillary Clinton having signalled plans to curb drug prices. Sharecast quoted analysts at Jefferies as commenting that they expected pricing pressure and political reform to remain an overhang for the sector, “though a Trump victory may not be particularly negative for large cap pharma”.

AstraZeneca is one of Jefferies’ main picks in the sector, along with AbbVie, Eli Lilly and Novartis, a group, which the broker argues “can deliver upside regardless of the sector fundamentals, particularly given some of the potential headwinds have already become priced into the sector”.
The Financial Times meanwhile reports that analysts forecast that AstraZeneca will report adjusted net income of $1.27 billion on sales of $5.96 billion in the third quarter, marking a modest improvement on the $5.95 billion of sales achieved in the same period last year. Earlier this year, the company posted a drop in half-year revenues, reflecting a decline in Product Sales, driven by patent expiries.

AstraZeneca’s “story remains one of a risky, pipeline-driven transformation on a shrunken revenue base”, which is reliant on innovation in cancer treatments to bring the promised growth in revenue,” analysts at Morgan Stanley commented, as quoted by the FT.
The results will also come after the FTSE 100 pharmco recently suffered a setback, with the group’s flagship drug Brilinta failing to help patients with a peripheral artery disease, calling into question AstraZeneca’s $3.5 billion-a-year sales target for the treatment by 2023.
As of 15:04 GMT, Wednesday, 09 November, AstraZeneca plc share price is 4,922.25p.