Title: Friday POW! — AstraZeneca (AZN): Pick of the Week Show: Haymaker (Substack, paid post) Guest: David Hay / The Haymaker Team Date: 2026-09-18 URL: https://haymaker.substack.com/p/friday-pow-20b Length: written post — no timestamps Note: Written Substack post (no video). Body text captured verbatim from the paid post via logged-in session. The post's two Bloomberg chart images are transcribed below as [Chart image — …] blocks (originals not reproduced). Standard Haymaker legal disclosures retained in abbreviated form at the end. Byline date on the page: SEP 18, 2026. No Buys / Trims-Holds portfolio tables were published with this issue.
Friday POW! Pick of the Week
HAYMAKER SEP 18, 2026 ∙ PAID
Key Highlights
Stock at ~$164; 52-week range $145.79–$212.71; market cap ~$254B; down ~23% from 52-week high; P/E 24x; forward P/E ~14.9x; EV/EBITDA ~13.9x; dividend yield 1.68%
H1 2026: Q2 revenue $15.38B +6% YoY (CC, Constant Currency), missed $15.46B consensus; adj. EPS $2.63 beat $2.48; H1 core EPS +11% YoY; interim dividend raised; guidance reiterated; $80B 2030 ambition reaffirmed
Oncology: 48% of product revenue, +16% YoY; Tagrisso $1.6B+ quarterly; Enhertu growing rapidly across DESTINY trial indications; Imfinzi broadening into bladder and gastric settings
As with all leading pharma companies, AI should be a powerful drug-discovery enabler and accelerant; we think this is underappreciated but likely to change as breakthrough drug announcements proliferate.
Pipeline: 20+ Phase 3 readouts next 18 months; Datroway for triple-negative breast cancer is advancing; Tezspire Phase 3 positive in eosinophilic esophagitis
Financials: trailing revenue $61.4B; gross margin 81.25%; net margin 17%; operating cash flow TTM $14.2B; free cash flow (FCF) $11.7 billion; long-term debt $24.5B; total debt $32B; cash $7.6B
Next earnings: November 6, 2026; ex-dividend August 7 ($0.795/share)
AstraZeneca (AZN) is a global biopharmaceutical company headquartered in Cambridge, UK, focused on oncology, rare diseases, cardiovascular, renal and metabolism, and respiratory and immunology. By most measures, it is running the most productive large-cap pharmaceutical pipeline in the world right now.
The stock is trading at approximately $164, down 23% from its 52-week high of $212.71, at a P/E of 24x (though, as noted above, just 14.9x the 2026 estimates) and a dividend yield of 1.68%. Two days ago the company announced Phase 3 wins in lung cancer that may redefine the standard of care in non-small cell lung cancer. The stock is at this price despite H1 2026 core EPS growing 11%, guidance reaffirmed, and a $80 billion 2030 revenue ambition that Citi has called achievable without a mega-acquisition. The discount has been created by three specific setbacks in three months, all manageable within the context of 20-plus Phase 3 readouts expected in the next 18 months. We are buyers.
The bull case is not complicated. AZN is generating 6% constant-currency revenue growth on a $61 billion base, converting that growth into 11% core EPS expansion, and maintaining 81% gross margins. The $80 billion 2030 revenue ambition implies approximately 30% revenue growth over four years, which against the company’s 18% compounded growth from 2020 to 2025 is ambitious but plausible if the pipeline performs. Management estimates new medicines in development could generate more than $10 billion in peak risk-adjusted revenue. At basically 15x this year’s consensus earning estimate on 11% core EPS growth, 23% below its 52-week high, the stock is where investors who understand the pipeline get paid for patience.
This Week’s Data: Two Wins and a Miss
The most significant development since Q2 came Sunday, September 14, when AstraZeneca reported that Enhertu (its co-developed cancer drug targeting tumors) beat the current standard treatment in a head-to-head Phase 3 trial in a specific subset of lung cancer patients. Patients on Enhertu went 14.3 months before their disease progressed, versus 8.3 months on the existing regimen, a six-month improvement that reduced the risk of disease progression or death by 37%. To put that in plain terms: the drug that doctors currently reach for in this setting is now demonstrably inferior to Enhertu. That is the definition of a standard-of-care change, and it expands the commercial runway for one of AstraZeneca’s most important growth assets. The same data release reinforced Tagrisso, AZN’s other major lung cancer drug, with real-world evidence showing that patients who stopped treatment early were more than twice as likely to see their cancer return.
However, the same week delivered a meaningful setback. Camizestrant, a drug AZN was developing for a common form of hormone-driven metastatic breast cancer, failed its Phase 3 trial. Long story short, it did not outperform the existing standard of care in a large randomized study. Morningstar cut its long-term revenue estimate for the drug by $700 million as a result. The competitive context makes this sting slightly more because a rival drug from Arvinas has already won approval in this same indication and now holds the lead position. Still, the failure does not touch the oncology franchise that is 48% of total product revenue and growing 16% year-over-year.
The week’s scorecard is two wins and one loss in a pipeline that has 20+ trials reading out over the next eighteen months, and that ratio is the investment thesis in a nutshell.
The $80 Billion Question and the Pipeline That Supports It
CEO Pascal Soriot has reiterated the $80 billion 2030 total revenue ambition on every earnings call since it was articulated, with explicit acknowledgment that the target “assumes successes and setbacks.” At H1 2026 trailing revenue of approximately $30 billion per half-year, reaching $80 billion implies meaningful continued growth. In our view, that’s consistent with the company’s 18% compounded revenue growth from 2020 to 2025.
Citi has gone on record calling the pipeline best-in-sector and capable of beating the target without a mega-acquisition. Management estimates new medicines could generate more than $10 billion in peak risk-adjusted revenue. Twenty Phase 3 readouts in 18 months provide plenty of catalyst firepower to test that estimate in real time. And, we love the diversity of the pipeline (oncology, rare disease, cardiovascular, respiratory) because it means that no single setback blows up the investment case.
On the AI front, AZN’s partnership with Tempus and Pathos to develop the largest multimodal foundation model in oncology is the most strategically significant of its AI commitments. AZN is making a direct investment in the data infrastructure that could compress drug discovery timelines and improve patient selection across the pipeline, though the commercial impact is probably at least a few years away. We believe the pharma and biopharma industries will be some of the biggest winners from AI by accelerating the drug discovery and approval process. It should lead to lower research and development costs, enhancing profitability.
Tozorakimab: The Massive COPD Opportunity
One of the more significant pipeline developments of 2026 that has not yet received the attention it deserves is tozorakimab, AZN’s drug for chronic obstructive pulmonary disease (COPD). This lung disease that makes it difficult to breathe affects nearly 400 million people worldwide and is the third-leading cause of death globally.
Three Phase 3 trials (OBERON, TITANIA, and MIRANDA) all read out positively in March 2026, demonstrating statistically significant and clinically meaningful reductions in moderate-to-severe COPD exacerbations across a broad patient population regardless of smoking status or a specific group of white blood cells called eosinophils. That last part is the commercial breakthrough: existing approved biologics for COPD target the The inflammatory pathway and are effective in only roughly 30% of patients, leaving the majority (particularly the approximately 40% with low eosinophil counts) with no biologic treatment option. Tozorakimab works upstream in the inflammatory cascade and demonstrated meaningful efficacy across all eosinophil levels, positioning it as the first biologic of its kind to demonstrate statistically significant reductions in COPD exacerbations across two replicate confirmatory trials.
AZN subsequently raised its internal peak sales projection for the drug to over $5 billion and submitted an NDA that the FDA accepted for Priority Review, with an approval decision expected in Q1 2027. A $5 billion peak sales drug receiving Priority Review that could more than double the addressable biologic market for COPD is exactly the kind of asset that could help propel AZN to its $80 billion revenue target for 2030.
Valuation
At $164, AZN trades at 24x trailing P/E, approximately 14.9x forward P/E, and 13.9x EV/EBITDA on a business generating $14.2 billion in annual operating cash flow. We’d argue that 14.9x is undervalued vs a market P/E of 21. And while analyst opinions on AZN show a wide range of outcomes, we are buying the central case: that the oncology franchise continues performing and that 20-plus Phase 3 readouts produce more wins than the three recent losses.
From a price-to-sales perspective, the chart below makes a pretty strong case that this is a solid entry point. Moreover, AstraZeneca’s forward P/E of 14.9x is near its lowest level in a decade, which is a range that has historically marked rewarding entry points for long-term holders. The price-to-sales ratio of 4.16x is similarly compressed relative to the 2020–2021 peak above 6x and the 2025 high near 5.5x.
10-Year P/E and Price/Sales Ratios for AZN
[Chart image — Bloomberg, "AZN LN Equity": Price to Sales Ratio [LTM] (white, right axis) 4.1632 and PE Ratio [1GBF Est] (blue, left axis) 14.8802, 2016–2026. P/E troughed ~13 in 2016–17, peaked ~25 in early 2020; P/S peaked ~6.6 in 2021 and ~5.5 in late 2025. Both now near the bottom of the decade range: P/E ~14.9 (near the 2016–17 lows), P/S ~4.16.]
Bloomberg
This is not a stock that has always traded cheaply, as AZN commanded 23 - 25x forward earnings at its peaks, and the current multiple represents a dip of roughly 40% from those levels. The last time both metrics were simultaneously near these lows was 2016 to 2017, before a multi-year re-rating drove the stock from approximately £40 to over £130 on the London Stock Exchange.
Technicals
The chart shows a steady up-trend over the last five years. However, there isn’t the clear breakout from a tight trading range that is our preferred price action pattern. On the positive side, you’ll notice that its prior three corrections over this timeframe were excellent buying opportunities.
[Chart image — Bloomberg line chart, "AZN US Equity", 09/18/2021–09/17/2026, 5Y daily with moving averages. Last price 164.66; moving-average markers at 182.9136 (yellow, the longest average) and 174.2997 (green); high marker 213.7942. Steady up-trend from ~$110 (2021–22) to a peak above $210 in late 2025, then a pullback to ~$160–165, now trading below all three moving averages. Volume panel shows a spike to ~15M+ shares in 2026.]
Bloomberg
Let’s Argue the Other Side
Three bear points are worth taking into account here. First, the recent trial failures are a reminder that when you have 20+ late-stage drug programs reading out over 18 months, you’re going to have some strikeouts. That’s simply the math of drug development. Second, U.S. drug pricing is a structural headwind that does not go away. Recent legislation allows Medicare to negotiate prices directly with pharmaceutical companies, and the broader political environment keeps pricing pressure elevated. The U.S. generates approximately 40% of AstraZeneca’s total revenue, so any systematic compression of what the company can charge in America hits a large number. Third, the $80 billion 2030 revenue target requires things to keep going right across a pipeline that has already shown it can miss. If two or three more programs fail and analysts start revising that ambition downward, the modest multiple the stock carries might compress even further.
While these are valid concerns, we think that the Enhertu lung cancer win, along with its COPD med news, announced over the last two weeks (on top of 16 successful late-stage trials in 2025) suggests the productive cadence is more durable than the recent setbacks imply. At 23% below the 52-week high and roughly 15x forward earnings, the market has already baked in a meaningful amount of pipeline skepticism into the price. The question is whether that skepticism is sufficient or excessive. We think it is excessive.
The Bottom Line
Investors in AZN today are buying the last decade of Pascal Soriot’s strategic rebuilding. More specifically, a company that has trained itself to produce at the frontier of oncology science at a pace and a breadth that most of its peers cannot match, on a revenue base large enough that no individual setback materially changes the trajectory. The DESTINY-Lung04 data two days ago is the latest expression of an engine that produced 16 positive pivotal trials in 2025 and has 20 more loaded up. We think this was built due to a decade of disciplined capital allocation into the right scientific bets, and from the kind of pipeline architecture that Citi called best-in-sector without a mega-acquisition to explain it.
The stock is at $164 because three programs missed in three months and the market repriced the uncertainty; that repricing is the opportunity. At 15x forward earnings and 23% below the 52-week high, the current price does not require the $80 billion 2030 ambition to be delivered on schedule. It requires the oncology engine to keep running at roughly the cadence it has demonstrated, which, on the evidence of this week alone, it is.
We recommend a BUY on AZN.
The Haymaker Team
IMPORTANT DISCLOSURES (abbreviated)
This material has been distributed solely for informational and educational purposes only and is not a solicitation or an offer to buy any security or to participate in any trading strategy. [...] David Hay is a passive owner of Evergreen Gavekal ("Evergreen"), a registered investment adviser with the Securities and Exchange Commission. As of 03/31/2025 Mr. Hay has no involvement in the day to day operations of Evergreen, nor is he involved with any investment research, or investment management performed by Evergreen. The information herein reflects the personal views of David Hay [...]. All expressions of opinions are subject to change without notice.