Taking Stock of AstraZeneca (LSE:AZN): Is Its 31% One-Year Return Now Fully Valued?

AstraZeneca (LSE:AZN) has quietly ground out solid gains over the past year, and today’s move is less about a flashy headline and more about how that trend stacks up against its fundamentals.

See our latest analysis for AstraZeneca.

The latest dip in AstraZeneca’s £135.92 share price comes after a strong run, with a 90 day share price return of 7.45% contributing to a 1 year total shareholder return of 31.08%, suggesting momentum is still broadly constructive.

If AstraZeneca’s steady progress has caught your eye, it could be a good moment to compare it with other quality names using our healthcare stocks as a discovery shortcut.

With earnings growing faster than revenue, a sizeable intrinsic value discount and analyst targets still above today’s price, investors now face a key question: is AstraZeneca undervalued, or is the market already pricing in its future growth?

Most Popular Narrative Narrative: 9.5% Undervalued

The most widely followed narrative sees AstraZeneca’s fair value at about $150.26, above the £135.92 last close, framing a modest upside story.

The analysts have a consensus price target of £136.49 for AstraZeneca based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of £180.93, and the most bearish reporting a price target of just £108.24.

Read the complete narrative.

Curious how mid single digit growth, rising margins and a richer future earnings multiple can still justify upside from here? The full narrative unpacks the revenue runway, margin reset and valuation assumptions driving that $150 plus fair value call, including how long AstraZeneca is expected to compound earnings before that higher multiple really has to be earned.

Result: Fair Value of $150.26 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this upside case hinges on managing looming patent expiries and mounting price pressure in key markets. Both of these factors could quickly compress margins.

Find out about the key risks to this AstraZeneca narrative.

Build Your Own AstraZeneca Narrative

If this view does not quite fit your outlook, or you prefer to interrogate the numbers yourself, you can build a custom narrative in minutes: Do it your way.

A great starting point for your AstraZeneca research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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