Broker snap: RBS maintains AstraZeneca at 'hold'

1st Apr 2011 11:58

Royal Bank of Scotland analysts have warned of tough times ahead for AstraZeneca, while keeping their "hold" rating on the drug giant."Although the company faces material headwinds in 2011, recent price data suggests that price rises for just two of its key products could counter the material impact of US healthcare reform on operating profit. This should provide support for cash flow generation, at least for this year."They estimate that the impact of those material price rises should be to support Astra's net cash flow from operating activities in 2011 at around the US$10.7bn reported for 2010.Also of great interest, RBS also believes that the company's fair value lies at £31.75 per share and they maintain their hold recommendation ahead of a US regulatory decision on Brilinta in July 2011.