Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
magazineTime to take profit in AstraZeneca
AstraZeneca (AZN) £68.57
Gain to date: 8.9%
Original entry price: Buy at £63.00, 15 November 2018
Our positive call on pharmaceutical giant AstraZeneca (AZN) has performed solidly. However, having reached a record high on 2 September, boosted by positive news on drug trials, the shares have since lost some momentum and we think now would be a good time to take profit as sentiment towards names on lofty valuations sours.
Based on 2020 forecasts the shares trade on a price-to-earnings ratio upwards of 20-times and as broker Shore Capital recently noted, ‘the shares are priced to perform and (we) would anticipate a pullback on any minor setback’.
This setback came in the form of reports that US lawmakers are planning a legislative crackdown on prescription drug prices. Our ultimate 9% gain might not look much but you would have also enjoyed dividends in the interim, which was part of our rationale for flagging the company.
Fundamentally this remains a good business, and the firm’s oncology or cancer portfolio is continuing to perform well.
On 9 September it reported that results from a clinical trial showed its lung cancer drug reduced the risk of death by more than a fifth in patients with previously-untreated extensive-stage small cell lung cancer.
SHARES SAYS: We still like AstraZeneca just not at this price.
Important information:
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
