AstraZeneca Stock Gains, But Valuation ‘Has Caught Up With Forecasts,’ Says Analyst

AstraZeneca (LON: AZN) shares rose 2% on Tuesday after the pharmaceutical group posted fourth-quarter results that broadly matched expectations, with analysts at Hargreaves Lansdown describing the update as “steady progress.”

Product revenue rose 8% to $15.5 billion, driven by a 20% increase in Oncology sales and a 10% rise in Respiratory and Immunology, which helped offset pressure elsewhere.

Underlying operating profit fell 5% to $4.1 billion, which the firm attributed to one-off payments of $235 million relating to changes in royalty agreements. Full-year free cash flow grew 18% to $11.8 billion, while net debt ended the year at $23.4 billion.

The company reiterated a $3.20 annual dividend, up 3%, and said 2026 revenue is expected to rise by mid-to-high single digits, ahead of consensus.

Hargreaves Lansdown's head of equity research, Derren Nathan, called the quarter “solid, if not spectacular,” noting that while oncology momentum accelerated, some areas faced headwinds from “generic competition and state-mandated price reductions in China.”

The firm added that political risk remains a feature of the sector but argued AstraZeneca’s diversified footprint and “focus on research-led innovation” leave it well positioned.

However, the broker cautioned that AstraZeneca’s valuation “now looks to have caught up with forecasts.”

While the pipeline supports long-term targets, including more than 25 blockbuster drugs by 2030, Hargreaves Lansdown warned that rising investment needs could pressure margins and that drug development carries “significant risk of failure,” creating potential downside even as medium-term prospects remain strong.