- Q4 and 2022 full-year earnings beat expectations
- Covid-19 medicines to contract significantly in 2023
- Strong pipeline on track to deliver 15 new drugs by 2030
Pharma giant AstraZeneca (AZN) delivered better than expected fourth quarter and full year core earnings per share and maintained 2023 guidance, giving the shares a 5% boost to £113.22. Over the last year the shares have gained 35%.
Total revenues increased 25% to $44.35 billion for the year ended 31 December and included the addition of rare diseases company Alexion, which became part of the group from 21 July 2022.
Core earnings per share increased 33% to $6.66 and AstraZeneca declared a second interim dividend of $1.97 per share taking the full year dividend to $2.9 representing a payout ratio of 44%.
CEO Pascal Soriot commented: ‘2022 was a year of continued strong company performance and execution of our long-term growth strategy.
‘We made excellent pipeline progress with a record 34 approvals in major markets and we are initiating new late-stage trials for high potential medicines.’
WHAT IS THE GUIDANCE FOR 2023?
The company expects Covid-19 revenues to decline ‘significantly’ in 2023 with minimal revenues from its original Oxford Covid-19 vaccine Vaxzevria.
This means total revenues are expected to grow by low-to-mid single digits.
Excluding Covid-19 medicines revenues are expected to increase by a low double-digit percentage while core earnings per share are expected to increase by a high single digit to low double-digit percentage.
Consensus expectations for core earnings per share sits at $7.3 according to data provider Refintiv which implies growth of 9.7% roughly at the bottom end of the guidance range.
Soriot said AstraZeneca is on track to initiate more than 30 late-stage trials through 2023 of which 10 have the potential to achieve peak sales above $1 billion.
‘Our R&D success and revenue increase in 2022 demonstrate that we are on track to deliver industry-leading revenue growth through 2025 and beyond and have set AstraZeneca on a path to deliver at least fifteen new medicines before the end of the decade.’
SHORE CAPITAL VIEW
Sean Conroy, pharma analyst at Shore Capital, commented: ‘AZN boasts an industry-leading R&D pipeline, in our view, with a breadth of next-generation innovative assets.
‘We see plenty of scope for the pipeline to surpass expectations and our forecasts reflect long-term, margin-enhancing revenue growth.’
AstraZeneca shares trade at a premium valuation to the sector which Conroy believes can be justified given the ‘impressive earnings trajectory and our conviction that AZN has the pipeline to sustain longer-term growth’.
