AstraZeneca PLC (LSE:AZN) shares climbed 3.5% in early trading, adding £6 billion to its market value, after reporting strong annual profits driven by its cancer, lung, and immunology treatments.
Revenue for 2024 grew 21% to $54.1 billion (£43 billion), while pre-tax profit jumped 38% to $8.7 billion on a constant currency basis.
The fastest-growing areas were cancer treatments, up 24%, and respiratory and immunology drugs, up 25%.
However, the Anglo-Swedish drug giant expects overall revenue growth to slow down to high single digits this year.
The company did not reference last week’s decision to scrap a £450 million expansion of its Liverpool vaccine facility after failing to secure sufficient state support.
AZ is also dealing with legal issues in China, where senior executives have been detained over allegations of unpaid import taxes on cancer medicines. The company said the disputed tax amounted to $900,000, with potential fines of up to five times that amount.
The stock, up 8% in the year to date, rose 390p to 11,516p.
Shore Capital sees AZ's stock as undervalued, trading at around 15 times its forecast 2025 earnings - similar to its peers but lower than the 17 times multiple it has historically commanded.
Despite uncertainty around its China business, the broker believes the shares still deserve a premium because of its strong earnings growth and promising drug pipeline.
ShoreCap values the stock at 15,000p per share, implying a higher multiple of around 20 times earnings could be justified.
The next couple of years are expected to be pivotal for AZ, with major clinical trial results due by the end of 2025.
These could help boost investor confidence, support share price growth, and reinforce the FTSE 100 group's long-term goal of reaching $80 billion in revenue by 2030.