Interactive Investor

ii view: UK’s biggest company AstraZeneca doing even better than expected

27th April 2023 11:33

by Keith Bowman from interactive investor

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A stable of cancer drugs, exposure to emerging markets and continued Phase III drug trials. Buy, sell, or hold?


First-quarter results to 31 March

  • Currency adjusted revenue up 15% to $10.73 billion
  • Currency adjusted core earnings per share up 6% to $1.92


  • Full-year guidance unchanged

ii round-up:

Pharma giant AstraZeneca (LSE:AZN) today detailed a robust start to the year, reporting growth in both adjusted sales and earnings which beat City forecasts. 

Despite an 80% decline in Covid-related sales year-over-year, growth in cancer and rare disease treatment of 19% and 14% respectively offset the shortfall, pushing adjusted sales up 15% and core earnings up 6% to $1.92 per share. 

The UK’s biggest company by stock market value (£184 billion vs Shell at £164 billion) rose by around 1% in UK trading having come into this latest news up by almost 13% over the last year. That compares to a near 6% gain for the wider FTSE 100 index over that time and a loss of 19% for pharma rival GSK (LSE:GSK)

Astra's quarterly Research & Development expenses of $2.3 billion continued to support innovation, with six new Phase III trials started in the period and the group on track to initiate 30 over the course of 2023.

Sales across Emerging Markets, stripped of Covid related products, led the way, climbing 22% to $3.16 billion, followed by growth of 15% in the US to $4.29 billion. European sales, including its home UK market, rose 9% to $2.15 billion. 

Costs for drug development are expected to impact over the full year, leaving management guidance for 2023 unchanged, with sales expected to rise by a low-to-mid single-digit percentage and core earnings by a high single-digit to low double-digit percentage. 

Broker Morgan Stanley kept its ‘overweight’ stance on the shares following the results, with the pharma currently one of its top stock picks. 

ii view:

Founded in 1999 through a merger, Anglo-Swedish pharmaceutical and biotechnology company AstraZeneca today operates in over 100 countries. Its core drug arenas include both Oncology, or cancer treatments and drugs for Cardiovascular, Renal and Metabolism (CVRM). Other areas include treatments for Rare Diseases and Vaccines and Immune therapies. 

For investors, required investment costs in drug development are expected to continue to weigh. Sales for its Covid-related products are retreating, acquisitions such as its recently announced purchase of American heart hypertension specialist CinCor for up to $1.8 billion, are not without risk, while rival GSK offers a more attractive dividend yield of 3.9% compared to 2% at Astra.

On the upside, a push to develop new treatments remains evident, cancer treatment sales accounted for just over a third of total revenues during its 2022 financial year, while Astra's 2021 takeover of US company Alexion expanded its portfolio of drugs into  rare diseases.

For now, and with analysts estimating a fair value share price of over £130, this high-quality Cambridge headquartered drugs giant looks to remain deserving of it place in many investor portfolios. 


  • Cancer treatment sales now total just over a third of overall sales
  • Acquisitions adding to diversity of drug treatments


  • Involved in various legal proceedings considered typical to its business, including litigation and government investigations
  • Currency movements can hinder

The average rating of stock market analysts:


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