Goldman Sachs raises AstraZeneca stock price target on HPP drug potential

Goldman Sachs has raised its price target on AstraZeneca (AZN) to GBP150.13, maintaining a Conviction Buy rating, driven by anticipated imminent Phase 3 trial results for efzimfotase alfa, which it believes has underappreciated commercial potential with unrisked peak sales forecast at $3.7 billion—85% above consensus. This bullish stance is further supported by AstraZeneca's robust Q2 2025 financial performance, which saw EPS nearly double forecasts and revenue exceed projections, alongside a similar price target increase from UBS and promising Phase 3 data for baxdrostat.

Analysis

AstraZeneca's outlook is strongly positive, reinforced by multiple bullish analyst actions and robust financial performance. Goldman Sachs has reiterated its Conviction Buy rating and raised its price target to GBP150.13, citing the underappreciated commercial potential of efzimfotase alfa, an enzyme replacement therapy for hypophosphatasia (HPP). Goldman Sachs anticipates imminent Phase 3 trial results and projects unrisked peak sales of $3.7 billion for the drug, a figure 85% above the market consensus of $2 billion. This optimism is supported by AstraZeneca's recent Q2 2025 results, which featured a 99.08% earnings surprise with an EPS of $2.17 and revenue of $14.46 billion, exceeding forecasts by 2.63%. The company's financial health is further evidenced by 15% revenue growth and a 33-year history of consistent dividend payments. Adding to the positive momentum, UBS also raised its price target, and promising Phase 3 data for another drug, baxdrostat, showed significant blood pressure reductions. The only note of caution is the company's decision to pause a planned £200 million investment in its Cambridge research site.

Key Decisions for Investors

• Investors should recognize the significant valuation gap between Goldman Sachs' $3.7 billion peak sales forecast for efzimfotase alfa and the market's $2 billion consensus, which presents a potential source of alpha if Goldman's thesis proves correct.
• The imminent Phase 3 trial results for efzimfotase alfa are a critical short-term catalyst; a positive outcome could lead to a significant re-rating of the stock, validating the recent analyst upgrades.
• While the financial and pipeline news is predominantly positive, the paused £200 million Cambridge investment should be monitored as it may signal a shift in capital allocation strategy or emerging operational headwinds.
• The combination of strong fundamental performance, including a 99% Q2 EPS surprise and a 33-year dividend history, may appeal to both growth and income-focused investors, especially given the stock is described as undervalued.