AstraZeneca PLC (LSE:AZN) fell 0.9% as analysts at Jefferies trimmed estimates and argued that clarity on margins may be needed for further stock upside.
The broker has a 'buy' rating on the Anglo-Swedish drugs maker but lowered its price target to 12,500p from 13,000p, as well as cutting EPS estimates by up to 5%.
Jefferies also reduced its forecast for EBIT margin to 36% for 2028, below the consensus of 38%.
“We argue [AstraZeneca] is primarily a top-line growth and pipeline story, but margin clarity may be needed for stock upside,” the broker said.
It believes margin clarity is sorely needed for the stock to work and that consensus margin forecasts need trimming.
Nonetheless, Jefferies believes its buy thesis remains intact “based on deep dives into R&D assets outside oncology largely being ignored, offering significant upside optionality, such as Airsupra, tozorakimab, and Farxiga follow-ons”.