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AstraZeneca: healthy half-years

Growth registered across all three therapy areas
July 30, 2020

In recent weeks, mention of AstraZeneca (AZN) has invariably been linked with the words ‘Oxford University’ or ‘Covid-19’. Little wonder - the UK pharma giant is working hard to tackle the new coronavirus, most prominently via a vaccine partnership led by the Jenner Institute in the City of Dreaming Spires. Early-stage human studies have produced encouraging results, and the next phase of trials is already under way. AstraZeneca has committed to supply more than 2bn doses of the vaccine, should it prove successful. 

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For now, it is impossible to know whether such efforts will bear fruit. Moreover, akin to peer GlaxoSmithKline (GSK), AstraZeneca does not intend to profit from the supply of a vaccine during the pandemic.

But – judging by Astra’s latest financial statements – that won’t be an issue. Indeed, the group’s second-quarter numbers revealed revenue growth of 11 per cent at constant currencies to $6.3bn (£4.8bn), beating consensus estimates by 1 per cent. Meanwhile, adjusted earnings per share (EPS) came in 3 per cent ahead of analysts’ projections, at 96¢.

Growth rates were similar for the half-year to June, bolstered by improvements across all three of the group’s therapy areas. Oncology revenues rose by 31 per cent, cardiovascular, renal and metabolism ticked up by 11 per cent and respiratory and immunology climbed by 7 per cent.

New medicines, which make up half of AstraZeneca’s total sales, performed particularly well – rising by 45 per cent on a like-for-like basis to $6.4bn, with good growth in emerging markets. Cancer drug ‘Tagrisso’ remained AstraZeneca’s top performer by sales, registering a 45 per cent improvement to $2bn. And in a reflection of the opportunities lying ahead, an announcement released to coincide with Astra’s interim figures revealed that it had been granted ‘breakthrough therapy designation’ in the US for a type of non-small-cell lung cancer.

Morgan Stanley expects adjusted EPS of 415¢ for 2020, up from 350¢ in 2019.

ASTRAZENECA (AZN)   
ORD PRICE:8,850pMARKET VALUE:£ 116bn
TOUCH:8,850-8,855p12-MONTH HIGH:9,320pLOW: 6,221p
DIVIDEND YIELD:2.4%PE RATIO:70
NET ASSET VALUE:934¢*NET DEBT**:100%
Half-year to 30 JunTurnover ($bn)Pre-tax profit ($bn)Earnings per share (¢)Dividend per share (¢)
201911.30.956.090.0
202012.61.911790.0
% change+12+111+109-
Ex-div:13 Aug   
Payment:14 Sep   
*Includes intangible assets of $3.1bn or 2,395¢ a share