Broker snap: With new leader, it's Astra's 'time to strike', says UBS

4th May 2012 15:15

Drugs giant AstraZeneca was added to UBS's 'Key Calls' list on Friday with the broker reiterating its buy recommendation on the stock."With the announcement that Chief Executive Officer Brennan is retiring and new Chairman Johansson is starting on June 1st, we increasingly see the likelihood of strategic announcements in 2012 that would unleash value in AZN shares," the broker said. UBS sees three such 'strategic announcements' as possible: "(1) AZN enhances sustainability by buying low-cost medicines to distribute using its leading geographical footprint, with c50-60% 2016-18E earnings per share accretion possible; (2) AZN bolts on assets that offer Crestor some protection from generics, boosting 2017-18E earnings before interest and tax by more than 15%; and (3) AZN is sold, perhaps at a 30%-plus premium."Regardless of what happens, the broker says that it expects visibility on key controversies to support the shares before long.The target price is lifted from 3,400p to 3,500p.Shares were trading 0.2% lower at 2,722p by 15:24, outperforming the wider FTSE 100 which was down 1.71%.BC