-Better than expected Q1 sales and profit
-2023 guidance reiterated
-Strong pipeline momentum
Pharmaceutical giant AstraZeneca (AZN) delivered better than expected first quarter sales and earnings on Thursday and reaffirmed full year guidance.
Investors welcomed the strong start to the year and confident outlook with the shares nudging 0.3% higher to £118.84. Over the last year the shares are up around 13%.
Revenues excluding Covid-19 related medicines increased 15% in constant currencies while reported revenue was flat at $10.88 billion, around 3% ahead of analysts’ estimates.
Astra’s cancer franchise (38% of total sales) is considered one of its best assets and it delivered revenue growth of 19% in the quarter to $4.15 billion.
The Cardiovascular, Renal, and Metabolism division increased revenue by 22% to $2.56 billion.
Core EPS (earnings per share) grew 6% year on year to $1.92 representing a beat of 12% according to Shore Capital analyst Sean Conroy.
WHAT DID THE COMPANY SAY?
CEO Pascal Soriot commented: ‘AstraZeneca had a strong start to 2023, with total revenue excluding Covid-19 medicines increasing 15%.
‘Our performance in Emerging Markets was particularly strong and I am impressed by the growth and pace of innovation I see in China, which underscores the competitive advantage of our leading presence in this country.
‘Our pipeline momentum continued with positive Phase III results for a Lynparza-plus-Imfinzi combination in ovarian cancer, Imfinzi in lung cancer, and promising new data for Enhertu across a range of cancer types.
‘Additionally, in the year to date we have started six new Phase III trials and are on track to initiate 30 over the course of 2023.
The company reaffirmed 2023 guidance with low to mid-single digit growth in revenue and excluding Covid-19 medicines which are expected to decline significantly, is expected to grow by a low double-digit percentage.
Core EPS is expected to grow by a high single digit to low double-digit percentage.
WHAT ARE ANALYSTS SAYING?
Shore Capital’s pharmaceutical analyst Sean Conroy has provisionally left his forecasts unchanged.
Conroy noted the consensus forecasts appear in line with the company’s guidance which implies 2023 core EPS of $7.30 (range $6.93-$7.55) representing 9.6% growth.
‘AstraZeneca boasts an industry-leading R&D pipeline, in our view, with a breadth of next-generation innovative assets.
‘AstraZeneca shares trade on a 2024 forecast price to earnings ratio of around 17 times, with the US and European peer group on around 16 times. We continue to believe a premium is warranted based on its earnings growth and industry leading pipeline.’
