Buying AstraZeneca stock appears to be a good investment opportunity going into 2024. The company has shown strong financial performance, with total revenue increasing by 5% and core operating margin increasing by three percentage points. AstraZeneca’s stock price is predicted to rise by 2.81% and reach $70.24 per share by January 9, 2024.
The stock has been trading below its April 2022 highs, but the company is executing well and making the right moves to stay in growth mode despite COVID-19. AstraZeneca has an envious product portfolio and pipeline, with blockbuster growth products in four of its five major segments and a pipeline that could expand its indications and reach the market within a few years.
The company has recently made strategic acquisitions, such as Icosavax, which could potentially increase its market presence and stock value. However, there are some concerns, such as the stock’s premium valuation, which could deter bargain hunters.
Despite these concerns, the overall positive financial performance, growth prospects, and strategic moves make AstraZeneca stock an attractive investment opportunity for those willing to take on the potential risks associated with the pharmaceutical industry.
Factors That Make Astrazeneca Stock a Good Investment in 2024
Several factors make AstraZeneca stock a good investment in 2024:
- Strong financial performance: AstraZeneca’s total revenue increased by 5% and core operating margin increased by three percentage points, indicating a solid financial foundation.
- Impressive product portfolio and pipeline: The company has blockbuster growth products in four of its five major segments and a pipeline that could expand its indications and reach the market within a few years.
- Research and development productivity: AstraZeneca has some of the best research and development productivity in large-cap pharma, with data readouts for key assets that may remind investors of the strength of its R&D engine.
- AI-driven drug development: AstraZeneca is engaging in collaborations with various AI companies, which could potentially improve its drug discovery process and make it more efficient.
- Strategic acquisitions: The company has made strategic acquisitions, such as Icosavax, which could increase its market presence and stock value.
- Positive earnings forecasts: Wall Street analysts predict that AstraZeneca’s share price could reach $81.50 by September 25, 2024, with an average upside of 21.01% from the current share price of $67.35.
- Dividend payout ratio: With the dividend payout ratio set to come in below 40% in 2023, investors can be confident that the dividend is quite safe, and the stock’s forward price-to-earnings ratio of 17.4 is well above the average of 13.4 for the drug industry.
Overall, AstraZeneca’s positive financial performance, growth prospects, strategic moves, and favorable analyst forecasts make it an attractive investment opportunity for those willing to take on the potential risks associated with the pharmaceutical industry.
Risks Associated with Investing in Astrazeneca Stock in 2024
There are several risks associated with investing in AstraZeneca stock in 2024:
- Premium valuation: AstraZeneca’s stock has a high price-to-earnings (P/E) multiple of 34, which is significantly higher than the pharmaceutical industry’s average P/E near 25. This could make the stock less attractive for bargain hunters.
- Market uncertainties: The stock market is subject to fluctuations, and there is always a risk that unforeseen events or market changes could impact AstraZeneca’s stock price. For example, the company’s stock price has been trading below its April 2022 highs.
- Research and development risks: Although AstraZeneca has been investing in AI-driven drug development and has a massive pipeline, there is always a risk that the company’s research and development efforts may not yield the desired results or that competitors may develop similar or better products.
- Regulatory risks: The pharmaceutical industry is heavily regulated, and there is a risk that non-compliance with regulatory requirements could lead to fines, penalties, or delays in product approvals.
- International market entry risks: AstraZeneca operates in a global market, and there is a risk that political, economic, or social factors could impact its ability to enter and succeed in new markets.
- COVID-19 risks: The ongoing COVID-19 pandemic poses risks to the company’s financial performance, as it has affected the demand for certain products and the development of new ones.
Investors should carefully consider these risks and conduct thorough research before deciding to invest in AstraZeneca stock in 2024.’
Current Market Trend for Astrazeneca Stock
The current market trend for AstraZeneca stock in 2024 appears to be positive. According to Barron’s, consensus estimates call for the company to deliver double-digit earnings growth, roughly 14% and 15% in 2024 and 2025, respectively, driven by a strong financial performance.
Wall Street analysts predict that AstraZeneca’s share price could reach $81.50 by September 25, 2024, with an average upside of 21.01% from the current share price of $67.35. Additionally, AstraZeneca has an impressive product portfolio and pipeline, with blockbuster growth products in four of its five major segments and a pipeline that could expand its indications and reach the market within a few years.
The company is also engaging in collaborations with various AI companies, which could potentially improve its drug discovery process and make it more efficient. However, there are some concerns, such as the stock’s premium valuation, which could deter bargain hunters.
The ongoing COVID-19 pandemic also poses risks to the company’s financial performance, as it has affected the demand for certain products and the development of new ones. Investors should carefully consider these risks and conduct thorough research before deciding to invest in AstraZeneca stock in 2024.