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AstraZeneca share price supported as JPMorgan hikes valuation

Shares in AstraZeneca (LON:AZN) closed higher in London yesterday, as analysts at JPMorgan Cazenove lifted their price target on the blue-chip pharmco in the wake of the group’s second-quarter results last month. The move marks a boost for the Anglo-Swedish drugmaker which this week agreed to pay $110 million to the state of Texas to settle lawsuits alleging that it falsely and misleadingly marketed two of its drugs in violation of the state’s Medicaid Fraud Prevention Act.

AstraZeneca’s share price rose 1.45 percent in the previous session, outperforming the broader UK market, with the benchmark FTSE 100 index shedding 0.45 percent to close at 7,741.77 points. The group’s shares have added more than a third to their value over the past year, as compared with about a 3.3-percent gain in the Footsie.

JPMorgan hikes target on AstraZeneca

JPMorgan Cazenove, which sees AstraZeneca as an ‘overweight,’ lifted its price target on the shares from 5,800p to 6,079p. Proactive Investors quoted the analysts as explaining in a note to clients that the valuation hike followed their updated numbers on the blue-chip drugmaker in the wake of the group’s recent Q2 results to make “further upgrades to new launch trajectories, and include risk-adjusted forecasts for three further pipeline shots on goal”.

Last month, the Anglo-Swedish drugmaker posted a rise in quarterly sales, having benefitted from a boost from new medicines, and reaffirmed its guidance for 2018, noting that it was on track to return to growth this year.

Double-digit upside to consensus

“We continue to see double-digit upside to consensus for new launch products in 2018 and 2019,” JPMorgan pointed out, as quoted by the newswire, adding that they continued to set their valuation on AstraZeneca at a 50-percent premium to large cap-pharma peers, justified by a more than twice as fast medium-term outlook.

As of 08:09 BST, Friday, 10 August, AstraZeneca plc share price is 6,069.00p.

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