- First quarter sales and profit beat expectations
- Strategy update scheduled for 21 May
- Full year outlook confirmed
Shares in AstraZeneca (AZN) surged 5% to £119.3 closing in on a new 52-week high after first quarter revenue and earnings eclipsed market expectations and the pharmaceutical company reiterated full year guidance.
After a few months of consolidation, the shares are back to winning ways and outperforming the FTSE 100 year to date.
The pharma giant grew revenue 19% to $12.7 billion for the three months to the end of March, around 7% higher than analysts’ consensus estimates driven by 26% growth from the cancer franchise.
Core EPS (earnings per share) was up 13% to $2.06 compared with market expectations of $1.92. The strong performance comes after shareholders approved a controversial pay rise for long-serving chief executive Pascal Soriot.
WHAT DID THE CEO SAY?
Commenting on the results Soriot said: ‘AstraZeneca had a very strong start in 2024 with substantial Total Revenue growth of 19% in the first quarter.
‘Our strong pipeline momentum continued and already this year we announced positive trial results for Imfinzi and Tagrisso that were unprecedented in lung cancer, the data from both of these studies will be presented during the ASCO plenary in June.
‘We are also looking forward to seeing the results of several other important trials throughout the year.
‘At our annual general meeting we were pleased to announce a 7% increase in the annual dividend, and at our investor day on 21 May 2024 we will outline the evolution of our company, underscoring our confidence in sustaining industry-leading growth.’
UNCHANGED OUTLOOK LEAVES ROOM FOR UPGRADES
Despite the strong start to the year AstraZeneca confirmed full year guidance which calls for revenue and core EPS for 2024 to grow by a low double-digit to low-teens percentage.
Analysts at Jefferies said current momentum leaves the door open for potential minor consensus upgrades later in the year.
Healthcare analyst at Quilter Cheviot, Sheena Berry said: ‘The Q1 results demonstrate the group’s ability to continue delivering strong growth while also looking to spend and innovate.
‘We will get a better idea of the exact detail of its pipeline and longer-term guidance at its investor day in May, but for investors the key ones to look out for include a Phase III readout with cancer drug Enhertu in a form of breast cancer and potential US approval in second line lung cancer with Dato-Dxd.
‘Should these come through for AstraZeneca, 2024 will shape up to be a successful year.’
