The drop in AstraZeneca shares on Thursday was more a consequence of a wider market selloff than disappointed with the pharmaceutical giant’s half year report.
The groups revenue surged 18% over the period on a constant exchange rate basis with the oncology, respiratory & immunology unit’s sales surging 22%.
A beat of analysts’ expectations for the period and a measured increase in the dividend will encourage investors. Core operating margins contracted slightly due to the seasonality of some drugs, but shouldn’t be a major concern. There was a notable spend on R&D during the period, which is to be expected given AstraZeneca have set themselves an $80bn annual revenue target.
Further compounding an all-around solid report for Astra, management increased revenue guidance to the mid-teens on a percentage basis from low double digits and increased Core EPS guidance accordingly.
“AstraZeneca’s vital signs are in good shape after the pharmaceutical giant’s mid-year update. The immediate pulse check on financials is encouraging,” said Derren Nathan equity research, Hargreaves Lansdown.
“Strong sales performances of note included cancer and cardiometabolic treatments giving management to raise the interim dividend by 7.5% to $1.00 per share as well as guidance for the current year.
“But perhaps a more important biomarker of Astra’s journey towards its target of $80bn in total revenues by 2030 is its ongoing R&D success where it’s spending nearly $3bn per quarter.
“There are no guarantees of further clinical success or blockbuster drug launches but AstraZeneca has a deep portfolio and an excellent track record of both operational and clinical success. The shares have had a good run that’s been matched by a sharper focus, as well as some interesting acquisition activity in novel therapeutic areas such as more targeted cancer treatment and rare endocrine (hormonal) diseases.”