Skip to main content

Market Overview

Argus Concerned With Near-Term Challenges At AstraZeneca

Share:
Argus Concerned With Near-Term Challenges At AstraZeneca

AstraZeneca plc (ADR) (NYSE: AZN) shares are currently trading at a discount to the S&P 500 Pharma companies, which Argus’ Stephen Biggar views as warranted, given the earnings challenges being faced by the company due to its current business transition.

Biggar initiated coverage of the AstraZeneca with a Hold rating.

Current Challenges

While mentioning that AstraZeneca was a “well-managed” company, the analyst noted that two of its top three drugs had lost patent protection over the past three years.

“Management is taking steps to address these losses by cutting costs and assembling a strong new drug pipeline, though the new drugs may not contribute substantially to revenue for several years,” Biggar stated.

The analyst expects the company to face meaningful revenue and earnings pressure at least through 2017.

Related Link: "Steady Growth" For Relypsa's Vetassa Launch

Dividend And Earnings

AstraZeneca pays an annual dividend of $1.40, representing a current yield of about 4.7 percent. Biggar believes the dividend is secure, given the company’s robust cash flow.

However, given the challenges being faced by the company at present, Biggar expects the payout to remain unchanged in 2016 and 2017.

The analyst expects the 2016 core EPS at $2.00, down from the $2.13 reported for 2015. Another 10 percent decline is expected in the 2017 EPS to $1.80.

Did you like this article? Could it have been improved? Please email feedback@benzinga.com to let us know!

Latest Ratings for AZN

DateFirmActionFromTo
Feb 2022SVB LeerinkMaintainsOutperform
Feb 2022DZ BankUpgradesSellHold
Dec 2021JefferiesDowngradesBuyHold

View More Analyst Ratings for AZN

View the Latest Analyst Ratings

 

Related Articles (AZN)

View Comments and Join the Discussion!

Posted-In: Argus PharamceuticalsAnalyst Color Biotech Health Care Initiation Analyst Ratings General

Latest Ratings

StockFirmActionPT
SEDGB of A SecuritiesMaintains411.0
PTLOPiper SandlerMaintains28.0
AOUTLake StreetMaintains26.0
RAPTPiper SandlerMaintains52.0
OCXLake StreetMaintains6.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com