Buy, Sell, or Hold AstraZeneca Stock? Key Tips Ahead of Q3 Earnings

Key TakeawaysZacks earnings estimates for AstraZeneca are currently at $4.06 per share. However, the earnings picture appears to brighten in 2025.The healthcare company has beaten earnings estimates in three of the past four quarters.Register now to see our 7 Best Stocks for the Next 30 Days report - free today!AstraZeneca AZN will report its third-quarter earnings on Nov. 12, before market open. The Zacks Consensus Estimate for sales and earnings is pegged at $13.04 billion and $1.01 per share, respectively. Earnings estimates for AstraZeneca have declined from $4.08 per share to $4.06 per share for 2024 over the past 30 days. However, estimates have risen from $4.68 per share to $4.69 per share for 2025 over the same timeframe.AZN Estimate MovementImage Source: Zacks Investment ResearchEarnings Surprise History for AZNThe healthcare bellwether’s performance has been mixed, with the company exceeding earnings expectations in three of the trailing four quarters while missing in one. It delivered a four-quarter earnings surprise of 4.74%, on average. In the last reported quarter, the company delivered an earnings surprise of 3.13%. Image Source: Zacks Investment ResearchFind the latest EPS estimates and surprises on Zacks Earnings Calendar.What Does Our Model Say for AZN?AstraZeneca has an Earnings ESP of +0.66% and a Zacks Rank #3 (Hold), indicating a likely positive surprise. Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Drug Sales Estimates: Tagrisso, Lynparza & Other Key DrugsSales of AstraZeneca’s key medicines, mainly cancer drugs — Lynparza, Tagrisso and Imfinzi — and diabetes medicine Farxiga, are expected to have driven the company’s top line in the third quarter, backed by strong demand trends.Regarding Tagrisso, the initial launch for the frontline NSCLC indication based on FLAURA2 data, for which approval was received in February 2024, is likely to have pushed up sales. However, mandatory price reductions in Japan may have continued to hurt sales.While Lynparza sales are likely to have risen year over year, the declining use of the PARP inhibitors class of drugs and increasing competition in the United States and price reduction in Japan might have hurt sales to some extent.Approvals for newer indications are likely to have boosted the sales growth of some key drugs like Imfinzi, Fasenra and Farxiga.The Zacks Consensus Estimates for Lynparza, Tagrisso and Imfinzi are $760 million, $1.63 billion and $1.23 billion, respectively.Our model estimates for Lynparza, Tagrisso and Imfinzi are $760.5 million, $1.64 billion and $1.22 billion, respectively.The Zacks Consensus Estimates for Fasenra and Farxiga are $416 million and $1.89 billion, respectively.Our model estimates for Fasenra and Farxiga are $408.2 million and $1.81 billion, respectively.Drug Sales Estimates: SymbicortLike the previous two quarters, sales of key respiratory medicine, Symbicort, are expected to have risen in the third quarter due to strong underlying demand in the United States and Emerging markets, which are likely to have offset the impact of generic erosion in Europe and Japan.The Zacks Consensus Estimates for Symbicort is $561 million, while our model estimate is 545.8 million.AstraZeneca’s other drugs, Calquence, Breztri and newer products, asthma drug Tezspire, breast cancer drug Truqap and lupus drug, Saphnelo (anifrolumab) are likely to have contributed to sales growth in the soon-to-be-reported quarter.Sales of AstraZeneca’s Rare Disease drugs like Ultomiris and Strensiq are expected to have been strong and contributed to the top line.Sales of AstraZeneca’s major legacy drugs have been declining due to rising generic competition. The trend is likely to have continued in the third quarter.Investors will be keen to know the sales number of AstraZeneca’s new products Airsupra (asthma), Voydeya (paroxysmal nocturnal hemoglobinuria) and Wainua (ATTRv-PN) as well as AstraZeneca and partner Sanofi’s SNY respiratory syncytial virus (“RSV”) antibody Beyfortus (nirsevimab).AstraZeneca records 50% share of gross profits on sales of Beyfortus in major markets outside the United States received from Sanofi as Alliance revenues. It also records Beyfortus product sales from products supplied to partner Sanofi under the Vaccines & Immune Therapies segment.AZN’s Alliance Revenue & CostsAlliance revenues are likely to have been an important contributor to the top line, driven by continued growth in royalties and profit share from partnered medicines.AstraZeneca’s SG&A costs are expected to have increased due to increased investment in launches for new products Airsupra, Wainua and Truqap. R&D costs are expected to have increased due to investment in the pipeline and costs related to recently closed acquisitions.Nonetheless, a single quarter’s results are not so important for long-term investors. Let us delve deeper to understand whether to buy, sell or hold AstraZeneca stock.AZN's Price Performance & ValuationAstraZeneca stock has declined 1.6% so far this year, slightly underperforming an increase of 12.8% for the industry, as seen in the chart below.AZN Stock PerformanceImage Source: Zacks Investment ResearchFrom a valuation standpoint, AstraZeneca appears attractive relative to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 14.35 forward earnings, lower than 17.74 for the industry. The shares are also trading below their 5-year average mean of 18.48. The stock is also much cheaper than that of other large drugmakers like Lilly LLY and Novo Nordisk NVO.AZN Stock ValuationImage Source: Zacks Investment ResearchAstraZeneca boasts a diversified geographical footprint as well as a diverse product portfolio with several blockbuster medicines. It now has 12 blockbuster medicines in its portfolio with sales exceeding $1 billion, including Tagrisso, Fasenra, Farxiga, Imfinzi, Lynparza, Soliris and Ultomiris. These drugs are driving the company’s top line with AstraZeneca launching them in more markets and in an increased number of indications.Oncology is AstraZeneca’s biggest segment. AstraZeneca is working on strengthening its oncology product portfolio through label expansions of existing products and progressing oncology pipeline candidates. AstraZeneca has been making significant progress with its pipeline in other areas like cardiovascular health, immunology and rare diseases.Backed by its new products and pipeline drugs, AstraZeneca believes it can post industry-leading top-line growth in the 2025-2030 period. AstraZeneca expects to generate $80 billion in total revenues by 2030. By the said time frame, AstraZeneca plans to launch 20 new medicines. It believes that many of these new medicines will have the potential to generate more than $5 billion in peak-year revenues. The company is also on target toachieve a mid-30s percentage core operating margin by 2026.However, AstraZeneca’s diabetes franchise faces stiff competition, while the respiratory unit is being hurt by pricing pressure.Its shares fell more than 7% on Tuesday amid rising concerns over ongoing investigations in China. Last week, AstraZeneca said that the president of its China subsidiary, Leon Wang, is under investigation by Chinese authorities. It is being speculated that its China chief is being investigated for fraud. A Bloomberg report mentioned that the investigation is for some “aggressive sales tactics” used for some cancer drugs. AstraZeneca issued a press release saying that it does comment on speculative reports.AstraZeneca’s sales in China improved in 2023 and in the first half of 2024 after facing some pricing headwinds in the second half of 2021 and 2022. It remains to be seen if the improving trend continued in the third quarter.Stay Invested in AZN StockNo matter how the third-quarter results play out, we suggest investors who own AstraZeneca stock stay invested, as the company has the potential to generate consistent profits.Buying the stock of this fundamentally strong company at the recent price dip can prove prudent for long-term investors who are interested in buying blue-chip companies. 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Click to get this free report Sanofi (SNY): Free Stock Analysis Report AstraZeneca PLC (AZN): Free Stock Analysis Report Novo Nordisk A/S (NVO): Free Stock Analysis Report Eli Lilly and Company (LLY): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks