AstraZeneca (LSE:AZN): Revisiting Valuation After a Strong Multi‑Year Share Price Run

AstraZeneca (LSE:AZN) has been quietly reshaping its growth story, and the latest trading action reflects investors weighing that shift against a share price that is already up about 31% over the past year.

See our latest analysis for AstraZeneca.

That momentum has cooled a little in recent weeks, with the 30 day share price return slightly negative, even as a strong 90 day share price return and robust five year total shareholder return suggest investors are still rewarding AstraZeneca’s execution and pipeline progress.

If AstraZeneca’s run has you rethinking your healthcare exposure, it could be worth scouting other ideas through healthcare stocks for more potential long term compounders.

With earnings still growing faster than revenue and the shares trading at a double digit discount to analyst targets, the key question now is whether AstraZeneca remains a buy or if markets are already pricing in its next leg of growth.

Most Popular Narrative Narrative: 8.2% Undervalued

With AstraZeneca closing at £134.44 against a narrative fair value of £146.44, the current price reflects optimism but not the full upside.

The company's robust and diversified late stage pipeline, particularly in oncology, rare diseases, and cardiovascular/metabolic therapies, is set to deliver multiple blockbuster launches over the next several years. Management estimates these new medicines could generate $10+ billion in peak risk adjusted revenue, directly supporting both long term high margin revenue growth and future earnings expansion.

Read the complete narrative.

Want to see how steady mid single digit sales growth, rising margins, and a rich earnings multiple combine into that valuation call? The full narrative reveals the exact profit runway and pricing power assumptions driving this fair value.

Result: Fair Value of £146.44 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, AstraZeneca’s reliance on blockbuster drugs and mounting exposure to price controls could quickly challenge those margin assumptions and long term growth expectations.

Find out about the key risks to this AstraZeneca narrative.

Build Your Own AstraZeneca Narrative

If you see the story differently or want to stress test every assumption yourself, you can build a personalized AstraZeneca view in just a few minutes. Start with Do it your way.

A great starting point for your AstraZeneca research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

Before you move on, give yourself an edge by hunting for fresh opportunities in minutes with Simply Wall St screeners built to surface high potential setups.

• Catch strong income opportunities early by scanning these 13 dividend stocks with yields > 3% that can help anchor your portfolio with reliable cash flows.
• Target high potential innovators by reviewing these 26 AI penny stocks that could benefit most from the accelerating adoption of artificial intelligence.
• Capitalize on mispriced opportunities by checking these 907 undervalued stocks based on cash flows that may be trading below what their future cash flows suggest.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com