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I think it’s fair to say AstraZeneca (LSE: AZ) shares have had a good few years. The share price dipped below £20 during the great recession before ballooning all the way to near the £120 mark as I write. A sixfold increase in value has made the pharmaceutical firm one of Europe’s biggest companies and the largest firm listed on the FTSE 100.
Will the run keep on going? Sadly, I don’t have any crystal balls lying around, so it’s impossible to say for sure. But one place to start looking is at analysts’ forecasts. These predictions cover the next year and essentially state where each analyst expects the share price to be. They aren’t perfect, but they can give us an idea of which way the wind is blowing.
And because AstraZeneca is one of Britain’s largest firms, the stock has a lot of eyeballs on it. That means a lot of predictions from some of the City’s top analysts.
The forecasts
The long and short of it is: analysts are very bullish on AstraZeneca. Of the 30 analysts covering the stock, 21 have it down as a Strong Buy and not a single one has it down as a Sell.
In terms of the 12-month targets, the average across all analysts is an increase to £137.76, which is a 19.79% bump from the price as I write (24 September). If the wisdom of crowds is in evidence here, then an increase to that share price would turn £10,000 into £11,979 in a year’s time with dividends to come on top of that.
The most bullish analyst of the lot has thrown down a £180.60 expected share price over the next year for a 57.04% increase. A £10,000 stake here ramps all the way up to £15,704 by this time in 2026. Not too shabby.
A buy?
With so many bright predictions for AstraZeneca stock, what are the upcoming catalysts that might cause such growth?
One rumour that has been doing the rounds is a move to a US listing. Like-for-like, stocks are simply valued higher in the US these days and AstraZeneca would be following the footsteps of stocks like Cambridge-based ARM Holdings in being based at stock exchanges over the pond. A 57% jump doesn’t look too much of an ask on those terms.
Another interesting quirk of investing in pharma is the importance of the R&D pipeline. A wonder drug like the recent weight loss treatments can do gangbusters for a pharma firm’s share price. On the flipside, a lack of new drugs has the complete opposite effect and may be a reason someone may not wish to invest. In AstraZeneca’s case, the current pipeline of 196 projects in development looks healthy. I’d call this a stock to consider.
