AstraZeneca's Oncology and Obesity Innovations Will Drive Revenue Growth by 10%

Catalysts

• Are there any products or services that could move sales or earnings meaningfully?
  • Most Immediate Catalyst (2024-2026):
    • Tagrisso (Lung Cancer): Expanding into early-stage lung cancer
    • Enhertu: Expanding beyond breast cancer into HER2-mutant lung & gastric cancers.
    • Imfinzi (Lung, Bladder, Liver Cancer): Checkpoint inhibitors are a fast-growing segment in immuno-oncology.
    • Alexion Rare Disease Portfolio Growing Faster Than Expected.
  • Mid-Term Growth (2026-2028):
    • Obesity & Diabetes (GLP-1 Competition with Novo & Lilly) → $5B+ market entry possible.
    • Cardiovascular Pipeline Could Disrupt Traditional Treatments.
    • Expansion to emerging markets
  • Long-Term Catalysts (2028–2030)
    • Gene Therapy & Cell Therapy in Oncology & Rare Diseases.
    • Obesity Market Could Become a $10B+ Business for AstraZeneca.

• Are there any industry tailwinds this stock is benefitting or hindered from?
  • ✅ Oncology will still be its biggest revenue driver (~50% of sales).
  • ✅ Obesity & metabolic treatments could become a multi-billion-dollar business.
  • ✅ Rare disease & gene therapy investments could boost long-term margins.
  • ⛔ Drug pricing & competition will be ongoing challenges.

Valuation

• Where do you think the business will be in 5 years time? AZN has the potential to become one of the top 3 global pharma leaders, alongside Merck & Novo Nordisk. Revenue is driven by oncology, obesity, and rare diseases with expanding profit margins (25%+) due to high-margin rare diseases & AI. AI will improve R&D efficiency. Obesity & metabolic treatments could be AZN’s biggest new revenue driver ($10B+).
• What do you think revenue and profit margins will be?
  • Revenue growth= 10-12%
  • Profit margin = 27% (from 13%)
• What do you think the valuation multiple will be in the future? PE= 18-22
• Based on my growth expectations, is the stock currently overvalued or undervalued? UNDERVALUED

Reasons to sell

• Has my narrative around this stock changed for the worse since I originally bought it?
  • Major patent expirations weaken revenue growth after 2028.
  • AZN fails to execute in obesity & metabolic diseases.
  • New drugs (gene therapy, cell therapy) don’t deliver expected results.
• Have I lost conviction in a narrative around this stock? NO
• Is the stock overvalued against my estimate of fair value? NO