AstraZeneca gets clean bill of health from leading investment bank

UBS reiterated its 'buy' rating on AstraZeneca (AZN) and raised its price target to 14,200p, implying over 27% upside, following strong second-quarter results that surpassed estimates in sales and operating profit, driven by robust US oncology and rare disease performance. The investment bank increased its 2025 revenue and core earnings forecasts by 1.1% and 1.6% respectively, citing effective cost control offsetting increased R&D spend. Despite a delayed lung cancer study readout, UBS remains confident in AZN's long-term growth trajectory, noting multiple growth drivers and potential underestimation of Imfinzi's sales potential, signaling significant further upside.

Analysis

AstraZeneca PLC (LSE:AZN) has received a significant vote of confidence from UBS, which reiterated its 'buy' rating and increased its price target to 14,200p, suggesting a potential upside of over 27% from its current price. This bullish stance is directly supported by the company's second-quarter results, which surpassed the bank's estimates for both sales and operating profit. The outperformance was driven by stronger-than-expected growth in the US oncology segment and a notable rebound in its rare disease division. Operationally, the company demonstrated disciplined cost management, which effectively offset a 9% increase in research and development spending aimed at advancing its drug pipeline. Consequently, UBS has revised its forecasts upward, lifting its 2025 revenue and core earnings estimates by 1.1% and 1.6% respectively. While the readout for the AVANZAR lung cancer study has been delayed to the first half of 2026, UBS views this as non-critical to the company's long-term growth targets. Key factors to watch include the upcoming clinical trial data for the potential hypertension treatment baxdrostat on August 30 and the bank's belief that consensus may be underestimating the sales potential of Imfinzi, suggesting multiple avenues for future growth.

Key Decisions for Investors

• Consider the reaffirmed 'buy' rating and 14,200p price target from UBS as strong validation of AstraZeneca's growth outlook, which is underpinned by outperformance in US oncology and rare diseases.
• Monitor the pivotal clinical trial data for the hypertension drug baxdrostat, due on August 30, as a significant near-term catalyst that could further influence valuation.
• Note the analyst's perspective that long-term growth remains intact despite the AVANZAR study delay, with potential upside from underappreciated Imfinzi sales and disciplined cost management supporting higher earnings forecasts.