UBS has told investors that the recent slide in AstraZeneca shares has gone too far, keeping its buy rating on the FTSE 100 drugmaker even after two clinical setbacks and speculation about a mega-merger.
The stock has fallen roughly 15% since early July, when two late-stage trials failed and reports surfaced of preliminary merger talks with Bristol Myers Squibb, the US pharmaceutical group.
UBS, the Swiss bank, cut its price target to 15,200p from 17,600p but kept the 'buy' call, pointing to more than 25% upside from the 11,925p close on 15 September.
The bank concluded AstraZeneca can still hit its target of $80 billion in revenue by 2030, grow through a patent cliff in the early 2030s, and looks cheap against European peers.
It trades on about 14.3 times forecast 2027 earnings, below Roche at 17.4 times and Novartis at 15 times.
UBS argued the shares fell too far after the July collapse of a heart study for Wainua and a breast cancer trial for camizestrant, followed by the merger reports.
On the tie-up, first reported by the Financial Times on 2 August, UBS said a deal made little sense, noting that mega-mergers have historically stalled research productivity.
The bank flagged four drugs with 2027 trial readouts that it believes each carry more than $5 billion in sales potential, including an oral cholesterol treatment and a prostate cancer therapy.
Analysts also lifted their peak sales forecast for a lung disease drug to $5.7 billion after strong data at a September medical conference.
Separately, Jefferies, the US investment bank, kept its own 'buy' rating and a higher 17,500p target after a briefing with Pam Cheng, AstraZeneca's head of global operations.
Cheng said the company's factories can support the $80 billion ambition, backed by recent investments of $50 billion in the United States, $15 billion in China and $1.5 billion in Singapore.
She added that artificial intelligence is being used across research and manufacturing, with a goal of halving drug development timelines by 2030.
Cheng also said carbon emissions had dropped 88% against a 2015 baseline even as output doubled.
