Broker tips: AstraZeneca, Pan African Resources
By Iain Gilbert
Date: Thursday 13 Feb 2025
(Sharecast News) - UBS upgraded AstraZeneca from 'neutral' to 'buy' on Thursday, citing the pharmaceutical firm's "sector-leading" drug pipeline.
UBS noted that AstraZeneca had scored second among global pharma peers, based on the Swiss bank's analysis of six strategic parameters.
"We see significant upside from in-market growth drivers and the broadest late-stage pipeline among its peers," said UBS. "We see recent quantification on the potential liability from China importation investigation as a meaningful step to resolution of investor concerns."
UBS also noted that AstraZeneca's current valuation of roughly 14.7x the company's core 2026 estimated price-to-earnings ratio reflected a 12% premium relative to peers. UBS has a 12-month price target for the stock of 14,200.0p.
"This is justified in our view by the superior growth and above-sector research and development productivity at AstraZeneca," it argued. "We see new Phase III from seven new drugs and multiple large life cycle management opportunities as key drivers of outperformance in 2025/26."
Analysts at Berenberg slightly lowered their target price on gold producer Pan African Resources from 42.0p to 39.0p on Thursday as they rebased their stance on the stock following the publication of its H1 numbers.
Pan African shares closed down roughly 3.6% on Wednesday and took the weekly drop to around 14%, having sold off on 10 February following the release of a H1 trading statement that guided for lower earnings.
Berenberg stated the quantum of the selloff was, in its view, a reflection of "a stellar share price performance" over the past 12 months and "perhaps some profit taking".
The German bank noted that the results themselves flagged cost pressure in Pan African's two underground assets in South Africa, with management working to cut costs at these assets.
"Still, these assets are higher cost than the low-cost surface deposits that comprise the majority of production," noted Berenberg. "While Barberton and Evander should generate decent cash flow in H2 and beyond at current elevated gold prices, we think that investors want to see costs coming lower at these assets and look for demonstrable signs of this."
Berenberg adjusted its model for the H1 results and made some "conservative adjustments" to expenses given higher costs at mines like Barberton and Evander.
"We lift our EV/EBITDA multiple to 4.5x (from 3.9x) to reflect portfolio growth not exhibited in current multiples, but adjusted forecasts and a softer NAV sees our price target move to 39.0p per share. We remain 'buy'-rated, with the shares trading on 1.15x NAV and 2.3x FY26E EBITDA, but H2 needs to be a half of delivery."
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN