Broker tips: AstraZeneca, Morgan Sindall

13th Feb 2026 14:11

(Sharecast News) - Shore Capital downgraded drugmaker AstraZeneca from 'buy' to 'hold' on Friday, stating the drugmaker's near‑term earnings outlook looked less favourable despite what it called "exceptional" R&D delivery.

The broker said AstraZeneca's 16 positive readouts in 2025, and more than 20 expected in 2026, supported confidence in its ambition to reach $80bn of revenue by 2030, a target Shore Capital already believes the company can exceed.

However, Shore Capital said that success comes with heavier investment needs, and noted that earnings growth between FY25 and FY28 was now set to slow to around 10% a year.

According to Shore Capital, AstraZeneca faces three pressures on earnings - rising R&D spend required to drive growth beyond 2030 and navigate major patent expiries, limited scope for further SG&A leverage following recent launches, and only modest gross margin progression. Against that backdrop, it said the shares now looked fully valued.

The broker noted AstraZeneca delivered another year of profitable growth in FY25, with total revenue up 10% and core earnings per share rising 16% at constant currency, but also warned that Farxiga, AZN's biggest seller, will come under significant generic pressure in FY26 as US patent protections expire, creating an estimated 3% drag.

Looking further ahead, Shore continues to see AstraZeneca reaching around $82bn of revenue by FY30, driven largely by oncology and risk‑adjusted pipeline contributions. However, it cautioned that sustaining growth beyond 2030 will require elevated R&D spend, with several key oncology drugs facing generic competition from 2032.

Analysts at Berenberg hiked their target price on construction firm Morgan Sindall from 5,400p to 5,800p on Friday in order to reflect another strong performance from the group's fit out division.

Morgan Sindall released a trading update on Thursday that indicated it anticipates FY25 results, due on 25 February, to be in line with current market expectations, though given progress in its key fit out division, FY26 was now expected to be significantly ahead of previous expectations.

"This is yet another very strong update from the team at Morgan Sindall, again reflecting the strength of the Fit Out performance, which continues to impress," said Berenberg, which has a 'buy' rating on the stock.

"We had previously forecast FY26 EBIT in Fit Out to be in the middle of the £80m-100m range, down from the exceptionally strong c£138m we forecast in FY25. As such, given the divisional guidance to be 'significantly above the top end of the mediumterm target', we increase divisional EBIT to £110m and lift FY26 group PBT by c8%."

The German bank added that Morgan Sindall currently trades at a 16.2x FY26 price-to-earnings ration, 9.4x EBITDA and 11.0x EBIT.

Reporting by Iain Gilbert at Sharecast.com