Shore Capital lowers AstraZeneca to 'hold'

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.

Reporting by Iain Gilbert at Sharecast.com