AstraZeneca share price: death cross nears ahead of earnings

AstraZeneca (LON: AZN) share price has struggled in the past few weeks as concerns about its cancer drug. After soaring to a record high of 12,350 in April, the stock has plunged by ~14% to 10,650, meaning it has moved into a correction. 

AstraZeneca earnings ahead

AstraZeneca is one of the biggest companies in the UK. It is the eighth-biggest pharmaceutical company in the world with a market cap of over $215 billion. The firm conducts research on various areas like oncology, cardiovascular, respiratory, rare diseases, and vaccines. 

AstraZeneca stock price plunged recently after a cancer drug it was working on disappointed. Results for datapotamab deruxtecan, which it is developing with Japan’s Daiichi Sankyo, showed some modest improvements. 

The company did not declare the results “clinically meaningful.” Also, there are concerns about the drug’s side effects, which include lung scarring. This cancer drug is important since the company hopes that it will offset its lost Covid-19 vaccine revenue.

The management will therefore be tasked with explaining the situation on Friday when the company will publish its financial results. Analysts are optimistic that AstraZeneca’s business did well in the second quarter. Also, the management will answer whether it is considering exiting China, as we wrote here.

Q1 results published in April showed that the company did well. Its revenue jumped to $10.9 billion while its core earnings per share jumped by 6%. Further, its core gross margin rose to 83.3% , helped by product mix and lower production costs. Operating income came in at $379 million while net debt jumped to $25.1 billion, 

AstraZeneca guided to low double-digit while the core EPS will jump by between single-digit to low-digit percentage points. For the quarter, analysts expect that revenue will jump to $11 billion while its EPS will come in at 80 cents.

AstraZeneca share price forecast

The daily chart shows that the AZN stock price has drifted downwards in the past few months. Notably, the shares are about to form a death cross, which happens when the 200-day and 50-day moving averages make a bearish crossover. The stock is trading slightly below the 23.6% Fibonacci Retracement level.

Therefore, the outlook for the stock is bearish, with the next level to watch being at 10,054p, the lowest level on July 11. This makes it a bit risky to buy Astrazeneca shares into earnings.