Broker snap: Reasons to buy at AstraZeneca

3rd Nov 2010 11:09

The recent share price weakness of drugs giant AstraZeneca has prompted Panmure Gordon to review the group's long-term prospects, and the broker has found plenty of "reasons to buy today".The broker notes the shares are 7.3% below the year-to-date peak in September and reckons the current share price is "an attractive entry level".Whatever the market may think of the stock currently, the broker still sees the stock as a relatively good performer. Analyst Savvas Neophytou highlights the Brilinta (Astra's anti blood-clot drug) registration by 16 December and the Zictifa (cancer treatment tablets) advisory committee meeting on 2 December as catalysts for outperformance in the coming months.Additional catalysts include the approval of the diabetes drug Dapagliflozin, and the SATURN clinical trial results."We remain buyers of AstraZeneca which is trading on a 9.1 times price to 2011 full year earnings ratio which we consider undemanding," Neophytou said. "AstraZeneca remains our top pick and we expect further upgrades to drive the share price.""Consensus forecasts for 2014 in particular remain persistently below our forecasts and we can expect as much as 17-20% upgrades to consensus in the next few months.""We expect the company to continue to 'beat' on earnings and quite possibly also increase the scope of its long-term guidance as early as January 2011 if the pipeline continues to crystallise further."The broker retains its 'buy' rating and has confirmed a target price of 3,600p.