Analysts at Citi see AstraZeneca PLC (LSE:AZN, NASDAQ:AZN) as 'the top pick' among European pharmaceutical firms'.
The FTSE 100 drugmaker is forecast by Citi to achieve the fastest mid-term growth in the sector, supported by both existing products and pipeline assets.
Analysts at the bank initiated coverage on AstraZeneca with a 'buy' rating as they expect the company to exceed its $80 billion revenue target for 2030, estimating sales at $82 billion.
Operational leverage and multiple product launches are seen as supporting profit margins in the mid-30% range.
Citi’s risk-adjusted pipeline forecasts equate to 86% of AstraZeneca’s 2024 revenue, more than covering the 36% the bank expects to be lost to patent expiry by 2034. Phase III data due in 2026 could support products worth over $30 billion in peak sales, and the launch of baxdrostat in hypertension could add another $6.00 billion.
“We see AZN as having the fastest mid-term sales and EPS growth in Europe Pharma,” Citi said.
With a price target pitched at £170 per share, Citi suggests substantial upside to the current price of around £137.84.
By comparison, the bank's UK-based analysts also began coverage of GSK PLC (LSE:GSK, NYSE:GSK) with a 'neutral' rating and £19 target (current price: £18.35), citing concerns about offsetting future patent losses.
GSK is seen as facing a flat EPS growth profile beyond 2027. Citi pointed to challenges in replacing revenues from its £7 billion HIV portfolio, which is facing loss of exclusivity from 2026.
While recent improvements in financial performance have driven upgrades and a strong share price, the analysts said upcoming product launches and pipeline data may not be enough to prompt further re-rating.
Nevertheless, Citi does note that GSK’s growth, margins, dividend policy, balance sheet and pipeline have all improved in recent years.