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Proactive Investors – After AstraZeneca PLC (LON:AZN) unveiled new sales and profit targets for the end of the decade, analysts were mildly impressed by the ambition to “shoot for the stars”.
Starting with the bare numbers, UBS noted that the new target to achieve $80 billion in total revenue by 2030 compared to consensus core revenue of $67 billion and its own forecast of $72 billion.
The Swiss bank currently forecasts that sales of $94 billion can be achieved if the companby enjoys “100% pipeline success”.
UBS sees the long-term margin target of at least mid-30s as “a little light of consensus expectations” but in-line with its view that AZ needs to invest heavily in order to execute the number of pipeline and commercial launches to achieve the sales targets.
AstraZeneca (NASDAQ:AZN) will share more details at today’s investor day event, including contextualising how the pipeline and its platform capabilities are in a position to sustain growth.
Before hearing what management says there, Shore Capital analyst Sean Conroy called the revenue ambition “bold”.
“We note the company had been signalling to the market that it expects to deliver industry-leading revenue growth from 2025 given the prospects in the development pipeline and the depth of its LCM [lifecycle management – ie developing drugs for new markets] strategy.”
AZ initiated around 30 Phase III clinical trials in 2023, Conroy noted, and today indicated that it expects to launch 20 new drugs by the end of the decade, with many expected to generate at least $5 billion in peak year sales, “and we note this is all in the backdrop of limited exposure to patent expirations during this period”.
He said hearing how AZN specifically have arrived at $80 billion and which pipeline assets will support this growth will be key to the event.
Having stepped up to the plate and delivered on its $45 billion revenue goal set a decade earlier, Russ Mould at AJ Bell said AstraZeneca is “now reaching for the stars” with its new sales target.
“An easy way for AstraZeneca to achieve such a goal would be to go on a spending spree and buy up rival companies. However, AstraZeneca implies it will hit the goal through organic means which would be all the more impressive.”
With chief executive Pascal Soriot having been the centre of some controversy over the scale of his pay packet – and whether it should be even bigger – “perhaps he is trying to justify the large renumeration with the new growth plan”, Mould added.
“Achieving the goal would imply significant value generation for shareholders and no doubt himself given that part of his bonus scheme will be based on company performance.”
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