AstraZeneca (LSE:AZN) shares may be on the move. The UK’s most valuable listed company is reportedly considering moving its primary stock market listing from London to the United States. This potential move has sent ripples through the City and global markets, raising big questions for investors and the future of the UK stock market.
Why would AstraZeneca move?
Why is AstraZeneca considering the switch? CEO Pascal Soriot is said to be frustrated with the UK’s regulatory regime and the broader investment climate, which he believes is lagging behind the US and China when it comes to supporting innovation and life sciences.
The US, AstraZeneca’s largest market (accounting for 42% of revenue), offers higher valuations for pharmaceutical companies and more generous R&D incentives. It also has a much deeper pool of investor capital.
The company has recently re-signalled its US ambitions with a $3.5bn investment in American manufacturing and by rejoining a major US pharmaceutical lobby group. However, such a move would be a major blow to London, which has already lost several high-profile listings in recent years.
What does this mean for UK investors?
I hold AstraZeneca in my pension and it’s one of my worst performers having moved sideways in recent years. So what would moving the listing mean?
Well, for UK investors, a US listing should simply mean their AstraZeneca shares are converted into US-listed shares, trading in dollars instead of pounds. This brings new currency risks and potential tax complications, but could also unlock a higher valuation for the company. The stock jumped on the reports, indicating some excitement about the potential move.
However, the move faces hurdles, including possible opposition from the UK government and some board members. It may also be the case that Soriot is simply trying to push the UK government to make more investment and give more concessions to the UK’s pharma and life sciences industry.
In short, AstraZeneca’s US listing could reshape the investment landscape for UK shareholders. However, it’s also worth noting that pharma stocks have faced increased pressure recently, given the position of the Trump administration on tariffs and drugs.
The bottom line
On the valuation front, AstraZeneca currently trades at a forward price-to-earnings (P/E) ratio of 15.5, which is lower than the sector median of 17.5. This suggests a discount relative to peers. This valuation is also below its own five-year average, reflecting a more attractive entry point for long-term investors.
Looking ahead, consensus estimates see the P/E falling to 14.2 in 2026, and dropping further to 9.9 by 2027, before hitting around 10.4 in 2028. This trend implies expectations for strong earnings growth, supported by AstraZeneca’s strong pipeline and global healthcare demand.
What’s more, with a strong dividend yield of 2.2% and a solid capital structure, AstraZeneca’s certainly worthy of consideration. However, investors should be wary that this sector isn’t risk-free. These companies often spend billions on new drug development only to disappoint in clinical trials.
