Astrazeneca (NYSE:AZN) Shares Gap Down - Should You Sell?

Key Points

• AstraZeneca shares gapped down sharply after opening well below the prior close, and the stock was last trading down about 6.7% amid heavy volume.
• The main catalyst was a late-stage trial failure: Wainua did not meet its primary goal of reducing cardiovascular deaths and recurring heart problems, a setback for the company’s pipeline.
• Despite the selloff, Wall Street remains constructive, with the stock carrying a consensus Moderate Buy rating and an average target price of $211.00, while other business updates like an Enhertu pricing deal and a respiratory-drug licensing agreement may help long term.

Astrazeneca Plc (NYSE:AZN - Get Free Report)'s share price gapped down prior to trading on Thursday . The stock had previously closed at $189.28, but opened at $173.45. Astrazeneca shares last traded at $175.2950, with a volume of 1,288,131 shares changing hands.

Astrazeneca News Summary

Here are the key news stories impacting Astrazeneca this week:

• Negative Sentiment: A late-stage Phase III trial for AstraZeneca’s Wainua failed to meet its main goal of reducing cardiovascular deaths and recurring heart problems, a significant setback for the company’s pipeline. Reuters article
• Negative Sentiment: Investors reacted sharply to the trial miss, with reports of AstraZeneca shares falling nearly 10% and wiping about £19 billion from its market value. Invezz article
• Neutral Sentiment: AstraZeneca and Daiichi Sankyo are reportedly nearing a UK pricing deal for the breast cancer drug Enhertu, which could support a key oncology franchise if finalized. Reuters article
• Neutral Sentiment: AstraZeneca also announced a respiratory-drug licensing deal with Sino Biopharmaceutical, a longer-term strategic move that adds to its pipeline but is being outweighed today by the trial failure. Reuters article

Wall Street Analysts Forecast Growth

Several equities research analysts have recently commented on the company. Morgan Stanley reissued an "overweight" rating on shares of Astrazeneca in a research note on Wednesday, April 8th. UBS Group reaffirmed a "buy" rating on shares of Astrazeneca in a report on Friday, April 10th. Weiss Ratings downgraded Astrazeneca from a "buy (b)" rating to a "buy (b-)" rating in a research report on Thursday, June 18th. DZ Bank raised Astrazeneca from a "neutral" rating to a "buy" rating in a report on Wednesday, April 29th. Finally, Bank of America restated a "buy" rating on shares of Astrazeneca in a research report on Wednesday, July 1st. Fourteen equities research analysts have rated the stock with a Buy rating and one has issued a Sell rating to the company. According to data from MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and a consensus target price of $211.00.

Astrazeneca Trading Down 6.7%

The company has a debt-to-equity ratio of 0.52, a quick ratio of 0.71 and a current ratio of 0.91. The business has a fifty day simple moving average of $184.14 and a 200 day simple moving average of $188.61. The stock has a market cap of $273.88 billion, a price-to-earnings ratio of 26.47, a PEG ratio of 1.57 and a beta of 0.24.

Astrazeneca (NYSE:AZN - Get Free Report) last released its quarterly earnings results on Wednesday, April 29th. The company reported $2.58 earnings per share for the quarter, topping analysts' consensus estimates of $2.52 by $0.06. Astrazeneca had a return on equity of 30.86% and a net margin of 17.19%.The company had revenue of $15.29 billion during the quarter, compared to analysts' expectations of $14.93 billion. As a group, equities analysts anticipate that Astrazeneca Plc will post 10.28 EPS for the current year.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently added to or reduced their stakes in AZN. Brighton Jones LLC grew its stake in Astrazeneca by 93.2% in the 4th quarter. Brighton Jones LLC now owns 5,782 shares of the company's stock worth $379,000 after acquiring an additional 2,789 shares during the period. AQR Capital Management LLC lifted its stake in shares of Astrazeneca by 45.3% during the 1st quarter. AQR Capital Management LLC now owns 37,501 shares of the company's stock worth $2,756,000 after purchasing an additional 11,690 shares during the period. Amundi boosted its holdings in shares of Astrazeneca by 54.4% during the second quarter. Amundi now owns 10,274 shares of the company's stock worth $731,000 after purchasing an additional 3,618 shares during the last quarter. Jump Financial LLC boosted its holdings in shares of Astrazeneca by 898.4% during the second quarter. Jump Financial LLC now owns 33,478 shares of the company's stock worth $2,339,000 after purchasing an additional 30,125 shares during the last quarter. Finally, Daiwa Securities Group Inc. grew its position in shares of Astrazeneca by 1.2% in the second quarter. Daiwa Securities Group Inc. now owns 46,642 shares of the company's stock valued at $3,259,000 after purchasing an additional 559 shares during the period. 20.35% of the stock is currently owned by hedge funds and other institutional investors.

About Astrazeneca

AstraZeneca plc is a global biopharmaceutical company headquartered in Cambridge, England. Formed through the 1999 merger of Sweden’s Astra AB and the UK’s Zeneca Group, the company researches, develops, manufactures and commercializes prescription medicines across a range of therapeutic areas. AstraZeneca positions itself as R&D-driven, investing in discovery science, clinical development and regulatory processes to bring new therapies to market.

The company’s commercial portfolio and late-stage pipeline emphasize oncology, cardiovascular, renal and metabolic (CVRM) diseases, and respiratory and immunology.

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