One for the brave, yes, certainly, but drugs giant AstraZeneca PLC (LON:AZN) is still a ‘buy’, according to City broker Liberum, which nudged up its price target following some key data and a sharp rise in the share price.
“It would be easy to downgrade Astra here,” said analyst Roger Franklin, referring to the 27% increase in the valuation in the last six months and the 9% advance since the publication of encouraging data from its PACIFIC lung cancer trial Friday.
“However, we have carefully considered the risk-reward profile and believe that would be the wrong decision.
“There is no getting away from the fact this is a nuanced and risky call, but we continue to believe the stock is attractive for those with risk appetite and the patience to look through what could be a volatile near term ride.”
MYSTIC trial results hotly anticipated
The Liberum number cruncher points to results from AZ’s MYSTIC phase III clinical trial of its immuno-oncology drug for lung cancer as another potential value trigger.
Franklin has pushed his price target up to £55 a share from £51, while the German bank Berenberg has upped its valuation of the stock to a slightly more punchy £58.50 from £56.70. AZ opened Tuesday flat at £52.38.
Of the 17 analysts logged as following the pharma major, eight are in the ‘buy’ camp and three have ‘sell’ recommendations. The remainder believe the stock is up with events.
The consensus price target, £52.90 six months ago, has actually come down a tad in that time to £51.24 – which is below the current stock market price.