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AstraZeneca stock: is it a buy now?

Scientist filling a needle
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Covid-19 vaccine developer AstraZeneca (LSE:AZN) released yet another strong set of numbers today for the first half of 2021. On the face of it, this could bode well for the FTSE 100 British-Swedish pharmaceuticals biggie, whose share price is up 12% since its last results update in April this year. 

AstraZeneca reports robust results

It reported a 23% increase in revenues compared to the same period in 2020. Its revenues excluding vaccine sales were lower at 14%, but still higher than the 11% seen in the first quarter of the year. Its net profits grew by a huge 42%.

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It has also completed the acquisition of US-based Alexion, which will allow expansion into areas like rare diseases and immunology. AstraZeneca’s numbers do not reflect Alexion’s figures so far, but they will be consolidated and included in AstraZeneca’s update for the third quarter, which will be released in November this year. 

Because of this, the company has raised its full-year guidance. It now expects revenue to grow by a “low-twenties percentage”, compared to the “low-teens percentage” it had estimated earlier. 

The question of profits

These are encouraging signs, indeed. But I am concerned about its post-tax profits for the second quarter, which declined by 25%. This is easy to overlook because the half-year number has seen impressive growth, supported by first-quarter figures. 

Its earnings in the last quarter saw a huge spurt because of a divestment. I will watch for further developments in earnings for AstraZeneca for this reason. Also, the number is particularly significant to watch because the company has seen dips in profits in the past as well. 

Nevertheless, for now, I am optimistic about it. It has increased its earnings per share guidance, which indicates that either it expects an organic increase in earnings or an earnings boost from the Alexion consolidation, or both. Either way, it is a positive for the company. 

What’s next for the AstraZeneca share price 

Its share price has also shed the uncertainty regarding its vaccine’s efficacy and its disagreements with the European Union regarding supply of vaccines. By early March this year, the share had fallen close to the levels last seen during the market crash last year. 

It has come a long way since, up almost 22%. But I think it can rise far more from here. The AstraZeneca share price is still around 5% lower than it was last year during this time. Admittedly, safe stocks were investor favourites then, as many other FTSE 100 stocks suddenly saw an uncertain future because of the pandemic

Even then, going by its performance, its outlook, and the fact that vaccine-related challenges seem to be a thing of the past, I think it can go back to not just those levels, but even higher. It is a long-term buy for me. 

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Manika Premsingh owns shares of AstraZeneca. The Motley Fool UK has no position in any of the shares mentioned. 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.

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