AstraZeneca: Deutsche Bank initiates coverage with 'buy'

(CercleFinance.com) - Deutsche Bank initiated coverage of AstraZeneca with a "buy" rating on Friday, as part of a larger sector initiation note on big European pharma stocks.


Deutsche Bank has a 10,000 pence target price for the stock, which was trading flat at 7,560 pence on Friday.

In its report, the broker said that large EU pharma companies are in the midst of an age of secular innovation that is witnessing unprecedented therapeutic advance in some of the most historically intractable fields of drug discovery and unmet medical needs.

However, valuation levels are inexpensive and after initially outperforming in the early stages of the pandemic, the sector underperformed through much of the second half of 2020 and sits toward the lower end of its five year P/E trading range, slipping to about a 10% market discount, vs. a 10%-20% historical premium, it added.

This makes for an appealing cocktail of characteristics into 2021, Deutsche Bank noted.

The broker said it is particularly positive on the names that offer upside risk to expectations on near-term growth and/or pipeline datapoints, such as AstraZeneca.

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