AstraZeneca stock forecast: will the vaccine give it a boost?

Despite developing a coronavirus vaccine, the AstraZeneca stock forecast has been hit by thousands of people nervous to take the shot. What’s going on?

The AstraZeneca stock forecast was certainly boosted by strong full-year results for 2020 – with the company expecting “continued progress” this year.

And although the company has been getting plenty of favourable column inches as a result of the joint vaccine it has developed with the University of Oxford, there have been some bumps along the way.

One particular setback came when Germany announced that it won’t be recommending the AstraZeneca vaccine to citizens aged over the age of 65. Health authorities in the country claimed there was “insufficient data” to verify that it’s effective in pensioners. This declaration spooked AstraZeneca’s share price – prompting fears that this might spark renewed scrutiny into the jab.

Reports subsequently emerged that barely 20 per cent of the AZN vaccines sent to the country were being used, meaning more than million were going unadministered. Articles also suggested that German Chancellor Angela Merkel had refused this particular kind of jab, on account of the fact that she was 66.

The brouhaha is rather uncomfortable for the EU, not least because it’s been rather behind the curve in distributing vaccines across the trading bloc. Nervousness that’s been created surrounding the jab has led some health workers in other countries – such as France – to end up expressing a preference for rival shots from the likes of Pfizer and BioNTech. They argue that they need the most effective vaccines available because of how they’re exposed to higher viral loads on a daily basis.

As such, AstraZeneca stock predictions could hinge on whether the company is able to produce the data that assuages concerns. Other institutions are far more encouraging of the vaccine’s potential. The World Health Organization says that it recommends that this jab is used by the over 65s. And SAGE – the group of scientists who are advising the British government – haven’t set an upper age limit for its use at all.

Given how billions of people are going to require vaccinations as quickly as possible, the prospect of millions of vials going unused certainly isn’t ideal. Current figures suggest that France has given out just 7 per cent of the 2.5 million doses that it has taken receipt of.

AstraZeneca stock forecast: Drilling into the numbers

Updating the market, AstraZeneca said that an impressive 50 per cent of total revenue had come from “fast-growing new medicines”. It’s worth remembering that the vaccine developed alongside the University of Oxford is just one of the many treatments that AZN has pioneered.

Striking an optimistic tone for the AZN stock forecast, chief executive Pascal Soriot said:

“The performance last year marked a significant step forward for AstraZeneca. Despite the significant impact from the pandemic, we delivered double-digit revenue growth to leverage improved profitability and cash generation. The consistent achievements in the pipeline, the accelerating performance of our business and the progress of the Covid-19 vaccine demonstrated what we can achieve.”

Let’s drill into the numbers that inform AstraZeneca’s share price a little bit more. Revenue across the whole of 2020 stood at $26.6bn – that’s up 9 per cent on the year before. Zooming into the fourth quarter, revenue came in at $7.4bn, an increase of 11 per cent compared with the same period of 2019.

A factor that may have been frustrating for some analysts making AstraZeneca stock forecasts lies in how the company said its guidance “does not incorporate any revenue or profit impact from sales” of the vaccine. Excluding the Covid-19 jab, total revenue is expected to grow by a “low teens percentage” – and strategists are going to have to wait until the first quarter of 2021 for a further insight, when sales of the vaccine begin to be reported separately.

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One development that could help AstraZeneca share price predictions immeasurably would involve America’s Food and Drug Administration giving this jab the green light. Some scientists have claimed that the US is dragging its heels in approving candidates – although to be fair, AstraZeneca has yet to lodge an application because a phase three trial in America is still under way. The FDA loathes to accept data from other countries, and once AZN is ready, it could receive emergency authorisation in a matter of weeks.

AstraZeneca stock forecast 2021: overcoming challenges

Given how rapidly vaccines have been developed, it seemed inevitable that there would be some hiccups when it came to rolling out supply chains and ramping up production – not least because of how the pandemic itself has affected business activity. However, it’s worth stressing that the AstraZeneca stock forecast could hinge on getting some of these early teething troubles ironed out as soon as possible.

Another factor that will help AstraZeneca share price predictions in 2021 will be data concerning how effective this jab is against variants of Covid-19 that are continuing to emerge – such as those in the UK, South Africa and Brazil. In order for life to return to normal worldwide, it will be crucial for these vaccines to be able to withstand any other strains that emerge. AstraZeneca has confirmed that it is working on a second generation of jabs that could be rolled out as early as the autumn.

Should I buy AstraZeneca shares?

So… AstraZeneca shares: buy or sell? Is AstraZeneca a good stock to buy?

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It’s fair to say that the companies that have developed coronavirus vaccines haven’t necessarily been wildly rewarded for their efforts in terms of share price appreciation. Pfizer – which has developed an extremely popular jab alongside BioNTech – has even seen its share price fall below the level it was at one year ago.

Let’s wrap up by looking at AstraZeneca share price predictions for the year ahead though. To cut a long story short, many analysts appear to believe that the stock is undervalued.

According to CNN Business, the median view suggests that there will be a 34.4 per cent rise over the next 12 months to $65. The high-end forecast anticipates a 53.2 per cent rise to $78.92, while the low-end estimate projects a 7.4 per cent drop to $44.81.

Twenty analysts currently rate the stock a buy, while two say it will outperform the market. Two strategists have a hold rating, and one is urging investors to sell.

Assuming that the image problem surrounding the vaccine can be shaken off, 2021 could be a historic year for AstraZeneca.

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