AstraZeneca AZN stock has risen 8.6% in the past month, mainly due to mixed fourth-quarter results and a positive update from management regarding ongoing investigations at its China subsidiary.
AstraZeneca missed fourth-quarter estimates for earnings but beat the same for sales. Revenues increased across all segments, with sales of most of the key drugs, including Tagrisso, Fasenra, Farxiga, Lynparza and Symbicort, beating estimates.
The British drugmaker said that the impact of the ongoing investigations in China remains minor on the business. In December, AstraZeneca appointed Iskra Reic as its new international executive vice president, replacing Leon Wang, who has been detained by authorities in China. They are investigating some current and former AstraZeneca employees for medical insurance fraud, illegal drug importation and personal information breaches.
AstraZeneca also issued fresh financial guidance for 2025 that was mostly in line with expectations. It expects total revenues to grow at a high single-digit percentage at CER.
Let’s understand the company’s strengths and weaknesses to better analyze how to play AstraZeneca’s stock in the post-earnings scenario.
AZN’s Strong Portfolio of Blockbuster Drugs
AstraZeneca boasts a diversified geographical footprint as well as a product portfolio with several blockbuster medicines. AstraZeneca now has 16 blockbuster medicines in its portfolio with sales (product sales and alliance revenues) exceeding $1 billion, including Tagrisso, Fasenra, Farxiga, Imfinzi, Lynparza, Soliris and Ultomiris. These drugs are driving the company’s top line backed by increasing demand trends. The company is confident that the growth will continue in 2025. Almost every new product it has launched in recent years has done well.
AZN Enjoys Strong Position in the Oncology Space
Oncology is AstraZeneca’s biggest segment. AstraZeneca is working on strengthening its oncology product portfolio through label expansions of existing products and progressing oncology pipeline candidates. Oncology sales (comprising around 41% of AstraZeneca‘s total revenues) rose 24% in 2024. The strong oncology performance was driven by medicines such as Tagrisso, Lynparza Imfinzi, Calquence and Enhertu (in partnership with Daiichi Sankyo).
A key new cancer drug approval was that of Truqap for HR-positive, HER2-negative (HR+ HER2-) breast cancer. The drug has seen a robust launch, recording sales of $430 million in 2024. In January this year, AstraZeneca and partner Daiichi’s drug, Datroway/datopotamab deruxtecan was approved by the FDA for HR+ HER2- breast cancer while a regulatory application is under review for EGFR-mutated non-small cell lung cancer (NSCLC).
AstraZeneca also has some important oncology candidates in its pipeline like camizestrant and volrustomig, both in late-stage development.
AZN’s Non-Cancer Pipeline Progress
AstraZeneca has been making significant progress with its pipeline in areas other than oncology, like cardiovascular health, immunology and rare diseases. Some key new drug approvals include Voydeya to treat extravascular hemolysis in adults with the rare disease paroxysmal nocturnal hemoglobinuria, Wainua (in partnership with Ionis [IONS]) for hereditary transthyretin-mediated amyloidosis, commonly referred to as ATTRv-PN and respiratory syncytial virus antibody Beyfortus (in partnership with Sanofi [SNY]). Key pipeline candidates in late-stage development arebaxdrostat for treatment-resistant hypertension, eneboparatide for chronic hypoparathyroidism and ALXN-2220 for transthyretin amyloid cardiomyopathy.
AstraZeneca is investing in disruptive innovation and transformative new technologies and platforms to discover novel medicines. The company is exploring modalities such as cell, gene and RNA therapies, epigenetics and oligonucleotides to identify new treatment approaches.
In 2024, it acquired small biotechs like Gracell, Fusion Pharmaceuticals and Amolyt to strengthen its pipeline.
China Investigations – A Near-Term Overhang for AZN
There have been rising concerns over the ongoing investigations at AstraZeneca’s China subsidiary.
AstraZeneca received a notification from a Chinese customs office regarding unpaid import duties totaling $0.9 million, which the company believes is related to Imfinzi and Imjudo. AstraZeneca may be imposed with a fine of one and five times the amount of unpaid importation taxes if found liable. Though AstraZeneca is working with the government for resolving these investigations, the issue will remain an overhang until then.
AstraZeneca expects Farxiga and Lynparza to be included in the volume-based procurement plans in China in 2025, which can hurt sales of these drugs in the country.
AZN Stock’s Price, Valuation & Estimates
AstraZeneca’s stock has risen 13.4% in the past year against a decrease of 5.2% for the industry.
AstraZeneca Stock Underperforms Industry
Image Source: Zacks Investment Research
From a valuation standpoint, AstraZeneca appears slightly attractive relative to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 16.11 forward earnings, lower than 16.61 for the industry as well as its 5-year mean of 18.23.
AZN Stock Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 earnings has declined from $4.70 per share to $4.52 per share over the past 30 days. For 2026, earnings estimates have declined from $5.24 per share to $5.00 per share over the same timeframe.
AZN Estimate Movement
Image Source: Zacks Investment Research
Stay Invested in AZN Stock
Despite headwinds like potentially lower sales of Farxiga and Lynparza in China in 2025 and ongoing China investigations, the company is confident of continued growth momentum in the Oncology, Rare Disease and CVRM segments in 2025. AstraZeneca believes that outside China. Farxiga and Lynparza sales should continue to grow due to continued market leadership.
Backed by its new products and pipeline drugs, AstraZeneca believes it can post industry-leading top-line growth in the 2025-2030 period. AstraZeneca expects to generate$80 billion in total revenues by 2030. By the said time frame, AstraZeneca plans to launch 20 new medicines, of which six have already been launched. It believes that many of these new medicines will have the potential to generate more than $5 billion in peak-year revenues. The company is also on target to achieve a mid-30s percentage core operating margin by 2026
Investors who own AstraZeneca’s stock may stay invested as the company shows potential to generate consistent profits.
AstraZeneca has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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