AstraZeneca PLC
AZNAstraZeneca is a global biopharmaceutical company focused on discovering and marketing prescription drugs.
It is a major player in the industry, known for its strong research pipeline and significant contributions to treatments in oncology and cardiovascular diseases.
Updated: February 19, 2026, 16:00 EST
Investment Opinion: Should I buy AZN Today?
Technical Analysis
AZN has exhibited extraordinary recent performance, surging over 120% in the past month and trading near its all-time high. This strong momentum is notable given its typically low volatility profile (beta of 0.19), suggesting sustained investor confidence. The shallow maximum drawdown of -16.79% indicates the uptrend has been relatively stable without significant corrections.
Fundamentals
Revenue growth remains steady, though profitability has seen slight pressure from rising operating expenses. The company maintains a strong gross margin near 80%, reflecting solid pricing power for its products. Financial health is reasonable with moderate leverage, but the current ratio below 1.0 warrants monitoring for liquidity.
Valuation
AZN appears richly valued with a forward P/E of nearly 31 and a notably high EV/EBITDA of 67.41. The negative PEG ratio suggests the current price may not be justified by earnings growth expectations. Investors are likely pricing in significant future growth from its drug pipeline, creating high expectations.
Risk
The stock demonstrates low volatility risk with its minimal beta and modest drawdowns. Lack of significant short interest reduces near-term squeeze risks. Primary risks involve sector-specific factors like regulatory changes or clinical trial outcomes, which are inherent to pharmaceutical investing.
Buy Recommendation
AZN shows compelling momentum and strong underlying profitability, but its current valuation appears stretched. The stock may be suitable for investors with high conviction in its pipeline's ability to deliver exceptional growth. A staggered entry approach could be prudent given the elevated price levels. Recall this is not investment advice but an analytical perspective for your consideration.
AZN 12-Month Price Forecast
RockFlow Model Forecast: Three Scenarios for 2026
Based on the comprehensive analysis provided, here is a 12-month outlook for AstraZeneca (AZN):
12-Month Outlook for AZN
The primary catalyst for AZN's continued performance over the next year is high investor confidence in its drug pipeline's ability to deliver exceptional future growth, justifying its current premium valuation. This outlook is supported by the company's strong pricing power and solid revenue trends. Key risks are inherent to the pharmaceutical sector, primarily the binary outcomes of clinical trials and potential regulatory changes, which could disproportionately impact the stock given its elevated valuation and the high expectations already baked into the price. While a specific analyst target is unavailable, investors should be aware that sustaining current price levels is contingent on the successful execution of its growth strategy; a failure to meet these lofty expectations could lead to a significant re-rating and price correction.
Wall Street Consensus
Most Wall Street analysts are optimistic about AstraZeneca PLC's 12-month outlook, with consensus target around $208.62, indicating expected upside potential.
Bulls vs Bears: AZN Investment Factors
Overall, AZN has investment potential but also faces challenges. Here are key factors to weigh before investing.
Bullish
- Record High Stock Performance: Shares hit fresh record high, cementing lead as UK's biggest stock.
- Significant Capital Investment: Announced $2 billion manufacturing investment plan for US sites.
- Positive Analyst Coverage: Featured among best pharma stocks with strong analyst ratings.
- Pipeline Progress: Positive lab news drove nearly 3% stock gain recently.
- Steady Price Rally: Stock has been grinding higher throughout the year.
Bearish
- Valuation Concerns After Rally: Strong year-to-date gains raise questions about current valuation.
- Growth Path Uncertainties: Company faces pressures and diverging priorities compared to peers.
- Competitive Market Position: Comparisons with AbbVie highlight relative strengths and weaknesses.
- Execution Risk: Large capital investment program carries implementation challenges.
- Pipeline Dependency: Future performance heavily reliant on drug development success.
AZN Technical Analysis
AstraZeneca has delivered extraordinary triple-digit returns across multiple timeframes, dramatically outperforming the broader market.
The stock has surged approximately 120% over the past month and 137% over three months, vastly exceeding general market performance as indicated by its +136% relative strength. This explosive short-term performance is highly unusual for a stock with a very low beta of 0.192, which typically implies low volatility.
At $207.78, the stock trades near the upper boundary of its 52-week range ($61.24-$212.71), sitting just 2.3% below its all-time high. Despite the massive rally, the relatively shallow maximum drawdown of -16.79% over the past year suggests the ascent has been characterized by strong momentum rather than severe corrections.
| Period | AZN Return | S&P 500 |
|---|---|---|
| 1m | +131.9% | +1.0% |
| 3m | +135.4% | +1.9% |
| 6m | +176.9% | +6.5% |
| 1y | +179.8% | +12.1% |
| ytd | +127.8% | +0.2% |
AZN Fundamental Analysis
Revenue & Profitability AZN maintained steady revenue growth from $15.19B to $15.50B quarter-over-quarter, though profitability metrics showed slight pressure. The net profit margin declined from 16.67% to 15.00% primarily due to rising operating expenses, while the gross margin remained strong at nearly 80%, indicating core pricing power.
Financial Health The company exhibits moderate leverage with a debt-to-equity ratio of 0.61 and a low debt ratio of 0.26, reflecting a conservative capital structure. However, the current ratio below 1.0 signals potential liquidity constraints, though interest coverage of 6.15x remains adequate for debt servicing.
Operational Efficiency Operational performance is mixed, with a modest ROE of 4.78% and low asset turnover of 0.14, indicating suboptimal utilization of assets. The cash conversion cycle is negative (-452 days), driven by extended payables terms, which favorably supports working capital management.
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis
With a trailing PE ratio of 31.77 and a forward PE of 30.93, AZN appears richly valued, trading at a significant premium compared to the broader market. The negative PEG ratio of -3.88 further signals potential overvaluation, as it indicates earnings growth expectations are negative or insufficient to justify the high earnings multiple. The extremely high EV/EBITDA of 67.41 underscores substantial overvaluation relative to its core operating profitability, suggesting the market is pricing in exceptionally high future growth that may not be sustainable.
Peer Comparison
A direct peer comparison cannot be provided due to the unavailability of industry average data. However, the company's valuation metrics, particularly the high PE and EV/EBITDA ratios, are likely at the upper end of the spectrum for the pharmaceutical sector. This elevated valuation places significant pressure on the company to deliver exceptional future earnings growth to justify its current market price.
Investment Risk Disclosure
Volatility Risk: AZN exhibits minimal volatility risk, with a remarkably low beta of 0.192 indicating the stock's price movements are significantly less pronounced than the broader market. The 1-year maximum drawdown of -16.79% is relatively modest for an equity, suggesting a historically stable price pattern with limited severe declines.
Other Risks: The absence of notable short interest signals that the market holds a fundamentally positive or neutral view on the stock, reducing the risk of a short squeeze. While this is favorable, investors should still consider other factors like sector-specific regulatory pressures or changes in drug pipeline efficacy that are inherent to the pharmaceutical industry.
FAQs
Neutral. While AstraZeneca shows impressive momentum and strong operational fundamentals, its current valuation appears stretched with a high P/E and negative PEG ratio. The stock is suitable for momentum investors who can tolerate the risk of a pullback after its significant rally, but may be less attractive for value-focused investors seeking a margin of safety.
Based on the valuation metrics, AZN appears overvalued. Its trailing PE of 31.77 and forward PE of approximately 31 are significantly high, and the negative PEG ratio of -3.88 signals that its earnings growth is insufficient to justify this premium. The exceptionally high Price-to-Sales ratio of 18.56 further confirms this rich valuation, likely placing it at the upper end of the pharmaceutical industry spectrum. This overvaluation is driven by market expectations for high future growth, which are not currently supported by its modest profitability (15% net margin) and operational metrics like the low ROE of 4.78%.
Based on the provided information, here are the key risks of holding AstraZeneca (AZN) stock, ordered by importance:
1. Extensive valuation risk exists following the stock's explosive +120% one-month surge to near its all-time high, creating potential for a significant price correction if growth momentum falters. 2. Pipeline and regulatory risk is inherent to the pharmaceutical industry, where a substantial portion of the company's value depends on future drug approvals and clinical trial outcomes, which are inherently uncertain. 3. Operational efficiency risk is indicated by a low return on equity (4.78%) and asset turnover (0.14), suggesting potential challenges in profitably deploying its large asset base despite strong revenue. 4. Liquidity risk is present, as a current ratio below 1.0 signals potential constraints in covering short-term obligations with short-term assets.
Based on a comprehensive analysis of AstraZeneca's financial health, industry position, and growth prospects, here is the forecast for AZN stock through 2026.
2026 Forecast & Target Price Range My base case target price for 2026 is in the $240 - $260 range, representing steady growth. A bull case, contingent on exceptional pipeline success, could push the stock toward $280+.
Key Growth Drivers 1. Pipeline Success: The successful launch and commercialization of key drugs in oncology (e.g., Datopotamab deruxtecan) and other therapeutic areas. 2. Pricing Power & New Indications: The ability to maintain strong pricing and expand labels for existing blockbusters like Tagrisso, Lynparza, and Farxiga.
Main Assumptions This forecast assumes continued mid-single-digit revenue growth, stable gross margins around 80%, and no major patent cliffs or negative regulatory surprises before 2026. It also incorporates a gradual improvement in return on equity (ROE) as new assets scale.
Forecast Uncertainty This outlook is highly sensitive to clinical trial results and regulatory decisions, with the potential for significant price swings in either direction. The stock's current premium valuation means any setback could lead to a sharp correction.