Analysts are saying the AstraZeneca share price looks cheap despite China turmoil

The AstraZeneca share price could be considerably undervalued according to analysts. Dr James Fox takes a closer look at the biggest FTSE stock.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The AstraZeneca (LSE:AZN) share price has been dragged down by several factors in recent months. Sub-optimal clinical trial results for its lung cancer treatment, Dato-DXd, raised concerns, as the drug failed to demonstrate statistically significant improvement in overall survival across the board.

Additionally, an ongoing investigation into its operations in China has surfaced, with reports suggesting that numerous senior executives could be implicated in a major insurance fraud case.

The pharma company has also faced relatively underwhelming early data from its weight loss drug portfolio, which analysts have described as disappointing. These issues, combined with general market uncertainty surrounding AstraZeneca’s growth potential in China, have pushed the stock down.

Should you invest £1,000 in Meta Platforms right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Meta Platforms made the list?

See the 6 stocks

No Sell ratings

AstraZeneca enjoys strong analyst support, with no Sell ratings currently issued. Top firms like JPMorgan Chase, Goldman Sachs, and Morgan Stanley maintain bullish stances, reflecting confidence in the company’s growth trajectory.

Analysts highlight the strength of AstraZeneca’s oncology pipeline, with key drugs such as Tagrisso and Imfinzi driving revenue growth. Goldman Sachs recently reiterated a Buy rating, citing promising developments in the cardiovascular and immunology segments.

While challenges like patent cliffs loom, AstraZeneca’s diversified portfolio and strategic R&D efforts continue to impress. The absence of any Sell ratings underscores widespread belief that the company’s innovation and execution will result in long-term value for investors.

Overall, the mean consensus remains a Buy from 20 analysts. The stock currently trades around 33% below the average share price target, indicating that the stock is likely undervalued at this time. The highest target of £180.34 suggests an even greater discount of 72%. Even the lowest target price of £105.56 offers a modest potential gain.

Positive forecast despite China report

AstraZeneca’s outlook remains positive despite recent reports suggesting potential sales weakness in China due to the ongoing government probe. The probe concerns allegations that AstraZeneca employees illegally imported cancer drugs like Enhertu and Imjudo from Hong Kong to mainland China and improperly collected patient data. This is alongside a broader investigation into a large health insurance fraud case, raising concerns about potential impacts on regional sales. Following the arrest of the company’s local boss, insiders are now forecasting a fall in sales in what is an incredibly important market.

However, analysts’ forecast, for now at least, suggest the company’s diversified portfolio can offset regional pressures, particularly with strength in oncology and immunology driving growth. AstraZeneca’s forward price-to-earnings (P/E) ratio of 24.6 times marks a significant improvement from 35.4 times in 2023, with projections falling to 20.3 times by 2025 and 17.6 times by 2026. This increasingly attractive valuation reflects confidence in sustained earnings growth and long-term resilience.

Even with the China issues, solid performance in other key markets, including the US and Europe, supports the consensus that AstraZeneca is well-positioned for continued success. It’s a stock I hold in my SIPP, a position I’m considering adding to.

5 stocks for trying to build wealth after 50

The cost of living crisis shows no signs of slowing… the conflict in the Middle East and Ukraine shows no sign of resolution, while the global economy could be teetering on the brink of recession.

Whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times. Yet despite the stock market’s recent gains, we think many shares still trade at a discount to their true value.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.

Claim your free copy now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

JPMorgan Chase is an advertising partner of Motley Fool Money. James Fox has positions in AstraZeneca PLC. The Motley Fool UK has recommended AstraZeneca Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Here’s the dividend forecast for Rolls-Royce shares as Trump rocks the markets

Rolls-Royce shares have joined in the volatility over the past week. However, with the direction being largely downwards, the dividend…

Read more »

Young Asian man drinking coffee at home and looking at his phone
Investing Articles

Dividend yields of up to 11%! Here are 3 UK passive income stocks to consider

Searching for ways to supercharge your passive income with UK dividend stocks? Here are three that have grabbed our writer's…

Read more »

Young Caucasian woman at the street withdrawing money at the ATM
Investing Articles

£10,000 invested in NatWest shares at the start of 2025 is now worth…

NatWest shares surged into 2025, but things have become a little more complicated in recent weeks. Dr James Fox explores.

Read more »

Investing For Beginners

Why the FTSE 250 could outperform the FTSE 100 for the rest of the year

Jon Smith explains why the FTSE 250 could do better than its big brother when factoring in domestic exposure and…

Read more »

Three signposts pointing in different directions, with 'Buy' 'Sell' and 'Hold' on
Investing Articles

Tariff fears send the Lloyds share price tumbling, but the dividend yield is climbing

Just when the Lloyds Banking Group share price had been rising steadily, along comes a global upheaval to knock it…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

Here’s how a stock market crash could help an investor retire years early

A stock market crash can be alarming -- but for the well-prepared investor, it can also be an exceptional opportunity…

Read more »

Investing Articles

1 key fact to remember in this stock market correction

This writer takes a look at a FTSE 100 investment trust that is catching his eye after the recent massive…

Read more »

Investing Articles

I was wrong about the Tesla stock price!

Tesla stock's been affected more than most by ‘Liberation Day’. But our writer has other concerns about Elon Musk’s company.

Read more »