Though the wider FTSE 100 had an incredibly tough 2018, AstraZeneca shares were one of the best performers.
Opening at £51.20, a confident charge between early May and mid-November led the stock to a record peak of £64.33, only for the market’s end of the year worries to drag it to a 2018 closing price of £58.61.
After a brief spurt higher, January carried over that December decline, in part prompted by the departure of several senior executives in a C-suite shake-up. Having struck a 6-month low, news in February that a potential medicine to prevent respiratory syncytial virus in babies and infants had been granted special status in the US and Europe then put it on the path to recovery. AstraZeneca shares now sit at a current trading price of £57.17.
With a strong launch for its new medicines, especially in its cancer division, products sales for the third quarter rose 9% against the 3% forecast, breaking a streak that had seen 9 consecutive quarters of sales decline. For the 9 months to date product sales were up 4% to nearly $15.3 billion.
This caused investors to overlook a nasty 31% plunge in pre-tax profit to $1.26 billion, and a 6% slide in total revenue, as AstraZeneca continued to suffer from the loss of the patent for cholesterol drug Crestor.
Given that the company said that it now expects a ‘period of sustained growth for years to come’ there is going to be a lot of pressure on Thursday’s full year results to show that the sales surge wasn’t a one-off. AstraZeneca is expecting a ‘low single-digit’ percentage increase in product sales for the full year, alongside core earnings per share of between $3.30 and $3.50. Its guidance for the new financial year could also be key.
AstraZeneca shares have a consensus rating of ‘Buy’ alongside an average target price of £62.43.
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