In short: Named alongside AbbVie and Vertex as Lebenthal's preference over Lilly (39:35) — a more diversified pharma than a GLP-1 franchise.
In short: Pick of the Week — "We recommend a BUY on AZN" at ~$164 ("We are buyers"), down ~23% from the 52-week high of $212.71; ~$254B cap; dividend yield 1.68%. Valuation: 24× trailing P/E but "just 14.9x the 2026 estimates" — "undervalued vs a market P/E of 21" — and 13.9× EV/EBITDA on $14.2B operating cash flow (FCF $11.7B); forward P/E "near its lowest level in a decade," P/S 4.16× vs >6× in 2020–21 and ~5.5× in 2025, a ~40% dip from the 23–25× forward peaks; both metrics last this low in 2016–17, before a re-rating from ~£40 to over £130. The engine: 6% constant-currency growth on a $61B base converting to 11% core EPS growth at 81% gross margins; oncology 48% of product revenue, +16%; 20+ Phase 3 readouts in 18 months; 16 positive pivotal trials in 2025; the $80B 2030 revenue ambition (Citi: achievable "without a mega-acquisition," pipeline "best-in-sector"). This week: Enhertu's DESTINY-Lung04 head-to-head win (14.3 vs 8.3 months PFS, 37% risk reduction) — "the definition of a standard-of-care change" — vs the camizestrant Phase 3 failure (Morningstar −$700M): "two wins and one loss… that ratio is the investment thesis in a nutshell." Tozorakimab (COPD): three positive Phase 3s across all eosinophil levels, peak sales raised to $5B+, Priority Review with a Q1 2027 decision. Bear case, argued: more strikeouts are "simply the math of drug development"; US drug pricing (~40% of revenue, Medicare negotiation); the $80B target needs things to keep going right. Technicals: steady five-year up-trend but no tight-range breakout; "prior three corrections… were excellent buying opportunities." Rebuttal: the skepticism priced in "is excessive." Next earnings November 6, 2026. No portfolio tables published with this issue.
AstraZeneca is one of the world's biggest drug companies (based in Cambridge, UK), with about $61 billion of yearly sales. Nearly half of what it sells is cancer medicine — lung-cancer pills like Tagrisso and the targeted drug Enhertu — and that business is growing about 16% a year. The company also sells drugs for heart, kidney, lung and rare diseases, and it keeps an unusually large number of new drugs in late-stage testing: more than 20 big final-stage trials will report results over the next year and a half.
The stock has fallen about 23% from its high because three of those trials disappointed in three months — most recently a breast-cancer drug (camizestrant) that didn't beat existing treatment. Haymaker's point is that when you run this many trials, some will fail; what matters is the hit rate. In the same week, Enhertu beat the standard lung-cancer treatment head-to-head (patients went six months longer before their cancer worsened), which is the kind of result that changes what doctors prescribe. And a COPD drug called tozorakimab — for a common lung disease affecting about 400 million people — passed three final-stage trials and works in patients current drugs don't help; the company thinks it could sell more than $5 billion a year, and the FDA is fast-tracking its review.
The price: about 15 times this year's expected profit, versus roughly 21 times for the stock market as a whole, and near its cheapest in a decade on both profit and sales measures. The last time it was this cheap (2016–17), the London shares went on to more than triple. The risks Haymaker names: more trial failures, US drug-price pressure (America is about 40% of sales and Medicare can now negotiate prices), and the chance the company's $80 billion 2030 sales goal gets cut. The chart also lacks the clean breakout the house usually likes, though past dips in this stock have been good times to buy. Verdict: a Buy — you are paid to be patient while a large, diversified pipeline does its work.
In short: Lebenthal agrees with UBS that the pullback is over. The drop came on a failed heart-drug trial ~two months ago; "with a quality pharmaceutical company like this that has… a very full pipeline, it's a time to buy" — attractively priced, good dividend yield, in a space "that does well regardless of what rates do."
In short: Lebenthal's final trade — borrowing Thomas's midterm-year sector call. "In a topsy turvy market, we're not quite sure which way it's going to go. I am with what Liz said, going with healthcare. AstraZeneca is right in the middle of the fairway for that space." Thomas's premise: in midterm election years "the sectors that tend to do the best are healthcare and staples… this year, healthcare is absolutely living up to that," now also as a beneficiary of the rotation out of tech into pharma and biotech.
In short: The other side of the day's pharma trade. Annika Kim Constantino: AstraZeneca "posted full phase three data on its drug for a progressive lung disease called COPD. The biologic treatment showed benefits across a broad population of current and former smokers, including a group that currently isn't eligible for existing biologics for COPD. And AstraZeneca's CEO told me this morning that's why the company sees the drug raking in more than 5 billion in peak annual sales."
AstraZeneca reported the full results of a late-stage trial for a biologic drug — a treatment made from living cells rather than chemicals — for COPD, a progressive lung disease mostly caused by smoking.
Two things make it commercially interesting rather than merely successful. It worked across a broad group of current and former smokers, and it worked in patients who are not eligible for the biologics already on the market — which is new demand rather than market share taken from a competitor. The company's chief executive told CNBC he expects the drug to reach more than $5 billion a year at its peak.
In short: Pipeline on trial. Q2 revenue +6% Y/Y to $15.4B ($50M miss) while core EPS was $2.63 ($1.36 beat). The stock is still down year-to-date after the Wainua heart drug missed its primary endpoint in CARDIO-Transform — a rare late-stage failure for a company that puts its trial success rate at 75% — so the question was whether one high-profile miss says anything about the pipeline behind it. Oncology carried the quarter, +6% cc to $7.3B: Imfinzi (lung) +27% to $1.8B, Enhertu (breast) +31% to $888M, Tagrisso still top seller +6% to $1.9B, offsetting patent-cliff declines in Farxiga and Brilinta. The pipeline delivered hits and misses — sonesitatug vedotin, the first pivotal readout from the wholly-owned ADC portfolio, improved gastric-cancer survival but missed progression-free survival, and Ultomiris disappointed in a rare blood disorder; against those, CEO Pascal Soriot pointed to positive data from six Phase III programs and insisted the $80B 2030 revenue target is risk-adjusted, assumes failures like Wainua, and needs no M&A. FY2026 guidance reiterated (mid-to-high single-digit revenue growth, low-double-digit core EPS growth). Twenty-plus readouts land over 18 months; Datroway (lung) and camizestrant (breast) matter most. (Recap, not a stance call.)
A drug company is worth what its pipeline will eventually sell, so a high-profile trial failure raises the question of whether everything behind it is also shakier. AstraZeneca's heart drug Wainua missed its main goal — rare for a company that claims a 75% trial success rate — and the stock is down this year as a result. This quarter was the rebuttal. Cancer drugs carried the business (Imfinzi for lung cancer up 27%, Enhertu for breast cancer up 31%), offsetting older drugs going off-patent, and the CEO pointed to positive results from six late-stage programmes while insisting the $80 billion 2030 revenue goal already assumes failures like Wainua and needs no acquisitions to reach. More than twenty trial readouts land over the next eighteen months; two — Datroway in lung cancer and camizestrant in breast cancer — will decide whether that target is credible. A recap, not a call.
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