Is AstraZeneca Still Attractive After Strong 2025 Rally and Pipeline Driven Revaluation?

• Wondering if AstraZeneca is still a smart buy after its big run, or if you are late to the party? This breakdown will help you decide whether the current price really matches the long term story.
• The stock has slipped about 3.6% over the last week but is still up 7.9% over the past month, 27.1% year to date, and roughly 30.0% over the last year, suggesting strong momentum with a bit of recent cooling.
• Recently, AstraZeneca has stayed in the spotlight with a steady stream of pipeline updates and regulatory decisions that keep reshaping expectations for its future revenue mix. These developments help explain why the market has been willing to re rate the stock despite periodic pullbacks.
• Right now AstraZeneca scores a 3/6 valuation check. This means it screens as undervalued on half of the metrics we track. Next, we will unpack those methods, and then finish with a more intuitive way to make sense of what that valuation really means.

AstraZeneca delivered 30.0% returns over the last year. See how this stacks up to the rest of the Pharmaceuticals industry.

Approach 1: AstraZeneca Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth by projecting its future cash flows and then discounting them back to today, so they are comparable with the current share price.

For AstraZeneca, the latest twelve month free cash flow is about $10.2 billion. Analysts and internal estimates see this rising steadily, with projected free cash flow of roughly $19.1 billion by 2029 and continuing to grow into the next decade as the pipeline matures. Simply Wall St uses a 2 stage Free Cash Flow to Equity model, where the first years are based on analyst forecasts and later years are extrapolated using gradually slowing growth rates.

When all those future cash flows are discounted back to today, the model arrives at an intrinsic value of about $237.13 per share. Compared to the current market price, this implies the shares trade at roughly a 43.0% discount, which suggests the market is not fully pricing in the expected cash generation.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests AstraZeneca is undervalued by 43.0%. Track this in your watchlist or portfolio, or discover 908 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for AstraZeneca.

Approach 2: AstraZeneca Price vs Earnings

For a profitable, established business like AstraZeneca, the price to earnings ratio is a practical way to judge valuation because it links what investors pay today with the profits the company is already generating. In general, faster expected earnings growth and lower perceived risk justify a higher normal PE, while slower growth or higher uncertainty should lead to a lower multiple.

AstraZeneca currently trades on about 29.8x earnings. That is above the broader Pharmaceuticals industry average of roughly 22.8x and well ahead of the peer group average of about 13.1x, which might initially make the stock look expensive. However, Simply Wall St goes a step further with its Fair Ratio, a proprietary PE estimate that reflects factors like AstraZeneca s earnings growth outlook, profitability, industry, market cap and risk profile. This tailored Fair Ratio for AstraZeneca is 31.2x. That provides a more nuanced benchmark than simple peer or industry comparisons because those ignore many of these drivers.

Comparing the current 29.8x PE with the 31.2x Fair Ratio suggests the shares trade at a modest discount to what would be justified by their fundamentals.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your AstraZeneca Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. This is a simple framework on Simply Wall St s Community page that lets you write the story behind your numbers by linking your view of AstraZeneca s business drivers to an explicit forecast for revenue, earnings and margins. This then connects to a Fair Value you can compare with today s share price to decide whether to buy, hold or sell. The Narrative updates automatically as new news, earnings or regulatory developments come through. Different investors can arrive at very different conclusions. For example, one Narrative assumes AstraZeneca can justify a Fair Value close to £180 by compounding oncology led growth and margin expansion. Another, more cautious Narrative, might see Fair Value nearer £108 if patent expiries, pricing pressure and pipeline execution risks have a greater impact than expected.

Do you think there's more to the story for AstraZeneca? Head over to our Community to see what others are saying!

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.

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