AstraZeneca’s Q4 Results Outperform; Shares Rise Pre-Market

Shares of the British-Swedish multinational pharmaceutical and biotechnology company AstraZeneca (AZN) rose around 3% in pre-market trading. The price movement followed better-than-expected results for the fourth quarter of 2021 on strong sales from the company’s COVID-19 vaccine and the acquisition of U.S. rare diseases drugmaker Alexion for $39 billion, completed in July 2021.

Results in Detail

AstraZeneca recorded adjusted earnings of $1.67 per share, topping the consensus estimate of $0.73 per share, and grew 56% year-over-year.

Total revenue generated in the quarter stood at $12.01 billion, up 62% year-over-year, and beat the Street’s estimate of $10.96 billion. Strong revenues in the segments of Oncology, CVRM (Cardiovascular, Renal, and Metabolism), Respiratory & Immunology, Rare Disease, and Other medicines acted as tailwinds.

Regionally, total revenue from Emerging Markets increased 63% year-over-year to $3.7 billion, while U.S. revenues grew 64% to $3.9 billion. Additionally, revenues in Europe stood at $2.9 billion, up 57%, and Established Rest of World revenues were $1.6 billion, up 64%.

For 2021, AstraZeneca reported adjusted earnings of $5.29 per share, up 32% year-over-year. Including COVID-19 vaccine revenues, total revenue came in at $37.4 billion, up 41%.

Guidance

For 2022, the company expects revenue to increase by a high teens percentage, while it projects core EPS to reflect a mid-to-high twenties percentage growth.

CEO’s Comments

In response to reported results, AstraZeneca CEO Pascal Soriot said, “AstraZeneca continued on its strong growth trajectory in 2021, with industry-leading R&D productivity, five of our medicines crossing new blockbuster thresholds, and the acquisition and integration of Alexion. We also delivered on our promise of broad and equitable access to our COVID-19 vaccine with 2.5 billion doses released for supply around the world, and we made good progress on reducing our greenhouse gas emissions.”

“Growth was well balanced across our strategic areas of focus, and we saw double-digit growth in all major regions, including Emerging Markets despite some headwinds in China. The positive news from our pipeline, including approvals for Evusheld and Tezspire, supports the outlook for 2022,” Soriot added.

Capital Deployment

AstraZeneca’s Board plans to increase the annualized dividend by $0.10 to $2.90 and has approved a second interim dividend of $1.97 for 2021. The interim dividend will be paid in March 2022.

Analysts’ Recommendations

Following the fourth-quarter results, UBS analyst Michael Leuchten maintained a Buy rating and a price target of 10,000p (16.1% upside potential) on AstraZeneca.

Consensus among analysts is a Strong Buy based on 10 Buys, 1 Hold, and 1 Sell. The average AstraZeneca stock forecast of 9,705p implies 12.62% upside potential from current levels. Shares have gained 13.8% over the past year.

Smart Score

AstraZeneca scores a 9 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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