By The pharmaceutical giant AstraZeneca has released its fourth-quarter financial report, and the results have left investors disappointed. Sales of several key cancer medicines fell short of expectations, leading to a decline in the company’s American depositary receipt. Deutsche Bank has even downgraded its rating of AstraZeneca’s stock from Buy to Sell.
While other major players in the industry, such as Eli Lilly, Pfizer, Merck, and GSK, have reported strong earnings this season, AstraZeneca seems to be an outlier. Emmanuel Papadakis of Deutsche Bank Research described the quarter as “thoroughly underwhelming,” with results missing expectations in crucial areas.
Specifically, sales of Tagrisso, Imfinzi, and Calquence, AstraZeneca’s cancer drugs, all fell slightly below consensus estimates. Overall, the company’s revenue for the fourth quarter was $12 billion, just below the FactSet consensus estimate of $12.1 billion. Core earnings per share were $1.45, slightly below the consensus estimate of $1.46.
These disappointing results serve as a reminder of the challenges faced by pharmaceutical companies in a highly competitive market. AstraZeneca will need to reassess its strategies and make adjustments to regain investor confidence.
AstraZeneca Forecasts Growth in Revenue and Earnings
AstraZeneca, a leading pharmaceutical company, has announced its expectations for an increase in revenue and core earnings per share in 2024. The company anticipates a growth rate in the low double-digit to low teens percentage range.
According to analysts surveyed by FactSet, AstraZeneca’s projected revenue for this year is estimated to climb by 10.6% to reach $50.7 billion. Similarly, analysts foresee a 14.2% increase in core earnings per share, reaching $8.29.
Despite the positive outlook, some concerns have been voiced regarding the company’s dividend. In 2023, the dividend amounted to $2.90 per share, falling below the FactSet consensus estimate of $3.03. This figure remained unchanged from the dividend in 2022. This disappointment is seen as a continuation of a previously stagnant decade with only minor adjustments.
During an investor call, AstraZeneca CEO Pascal Soriot expressed confidence in the company’s performance and its ability to achieve superior growth over the next ten years.
AstraZeneca aims to achieve an operating margin in the mid-30%s range in the mid-term, with a reported operating margin of 32% in 2023. However, this accomplishment has raised concerns among analysts, with some speculating the possibility of margin contraction.
This year, AstraZeneca’s American Depositary Receipts (ADRs) have experienced a decline of 1.2%, contrasting with the broader S&P 500, which has shown a 4.7% increase.
Comments