Zacks senior drug industry analyst Jason Napodano, CFA has reiterated his Hold recommendation on AstraZeneca (AZN) shares this morning. We looked into the report to find the details:
AstraZeneca PLC is engaged in the research, development, manufacturing and marketing of ethical (prescription) pharmaceutical products. The company ranks among the top pharmaceutical companies in the world based on revenues and global sales force. It is a leader in cardiovascular, cancer and gastrointestinal drugs.
We are optimistic on sales trends for existing drugs, such as Arimidex and Symbicort, as well as continued strength in its schizophrenia drug Seroquel and cholesterol drug Crestor. In April 2007, the company agreed to acquire biotechnology company MedImmune (MEDI) for $15.2 billion in cash. The transaction should close on or about June 18, 2007. We see $58 as fair-value. Our rating is Hold.
Based on our financial model, the company will post a five-year CAGR [compound annual growth rate] of around 6-7%, down slightly from our last update due to the dilution from MedImmune. The current P/E [price-to-earnings multiple] of 13.0x is below the large-cap pharmaceutical peer-group average of 16.5x. Given that growth should pick up in 2009 once MedImmune becomes accretive, we believe that the name does offer attractive upside.
Read the analyst report on AZN
Read the analyst report on MEDI