Financial Trading Blog
Stock of the day 02/02/2016 – AstraZeneca PLC
After a relatively erratic 2015, which saw highs of £49.35 and lows of £37.46 separating by only a few months, AstraZeneca found a relatively successful rhythm at the end of 2015, especially following its third quarter update at the start of November. Trading at around £42, on November 5th AstraZeneca announced that it was lifting its full year forecasts despite a 10% drop in revenue and a 2% fall in earnings during the third quarter.
(Source: IT-Finance.com 02/02/2016)
Just one day latter Astra revealed even bigger news, announcing it was buying ZS Pharma for $2.7 billion. The US company, valued at $90 a share by Astra, was bought by the UK giant for its high potassium level treatment technology; currently ZS Pharma has a hyperkalemia (the proper term for high potassium) battling drug that, if approved by the FDA, would be would around $1 billion a year in sales.
After reacting positively to the earnings update investors appeared a bit taken aback by the M&news, sending Astra from the £42.50s to just below £40 in the space of a few days. However, with the company’s lung cancer drug Tagrisso receiving FDA-approval in the middle of November AstraZeneca was soon back on track, surging to an 8 month high of £46.28 by the start of December.
A wobble in the middle of December was then soon overcome, and by the end of 2015 the stock was trading back at that 8 month peak. However, as has been the case throughout the markets, AstraZeneca suffered at the start of 2016, at point hitting a low of £41.81 for the first time in 2 months. AstraZeneca now sits at a current trading price of £45.02 (IT-Finance.com, 02/02/2016), aided by the FDA approval of its prostate cancer treatment Lynparza at the end of January.
AstraZeneca PLC has a consensus rating of ‘Hold’ with an average target price of £49.60.
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