Why AstraZeneca Stock Is Down By 6% Today

AstraZeneca Stock Declines After Earnings Report

Shares of AstraZeneca found themselves under significant pressure after the company released its quarterly results.

AstraZeneca reported revenue of $9.87 billion and adjusted earnings of $1.08 per share, beating analyst estimates on both earnings and revenue. However, the company’s GAAP loss of $1.10 per share missed analyst estimates by a wide margin, which served as a negative catalyst for the stock.

The company reiterated its full-year guidance, but it looks that the market expected that it would set more aggressive targets.

AstraZeneca has also stated that it would begin to sell its coronavirus vaccine for a profit. In the quarter, COVID-19 vaccine added $0.01 to the company’s EPS, and AstraZeneca expects that vaccine’s contribution to earnings will gradually increase in the upcoming quarters, although its contribution in the fourth quarter of this year will be limited.

What’s Next For AstraZeneca Stock?

AztraZeneca is projected to report earnings of $3.27 this year and $3.98 per share in the next year, so the stock is trading at 15 forward P/E.

It looks that the market does not believe that the company’s coronavirus vaccine will be able to materially boost its profits as the market is dominated by vaccines from Pfizer and Moderna. In addition, the market has recently became more cautious towards vaccine makers due to low visibility of vaccine-related earnings after 2022.

It should be noted that AstraZeneca stock is trading at a premium to Pfizer stock, and it remains to be seen whether this premium is justified. Current valuation levels do not look to cheap so multiple compression is possible, which is bearish for the stock. AstraZeneca shares have recently traded near yearly highs so opportunistic traders may choose to wait for additional pullback before initiating new positions in the stock.

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