Analysts at Berenberg slightly lowered their target price on drugmaker AstraZeneca from 105.0p to 100.0p on Friday but said they were “optimistic” about the firm’s pipeline destiny.
Berenberg said AstraZeneca’s third-quarter results disappointed the market, with shares underperforming its peer group following their publication, down 12% versus large pharma’s 4% decline.
The German bank, which also reiterated its ‘buy’ rating on the stock, said Astra’s results were obfuscated by its Covid-19 vaccine profit and loss statement and the first-time inclusion of newly acquired pharmaceutical business Alexion. It also noted that Tagrisso sales missed due to a China price cut to accommodate more volume and full-year 2021 guidance was only reiterated.
“We lower our sales forecasts by 1% and lower our EPS forecasts by 2-4% to reflect increased R&D spend, which puts pressure on margins,” said the analysts.
“However, our Return on R&D Investment (RORI) analysis supports management’s plans to reinvest in the pipeline as AstraZeneca generates a historical and predicted return above the cost of capital.”
JPMorgan Cazenove upgraded Crest Nicholson on Friday as it took a look at the UK housebuilding sector.
The bank said that after underperforming the market last year, the sector’s performance has been largely in line with the market this year.
“We continue to find the sector’s valuation attractive on 1.4x P/TNAV in line with the LT average, with potential to improve returns over 2022-23,” it said.
“In our view, the key themes this year will be: 1) the well-anticipated rate hikes; 2) continued focus on inflation and associated margin dynamics; 3) upcoming Future Homes Standard (FHS) regulation; 4) tax rates changes from 19% currently to 29% by 2023; and 5) potential resumption of surplus returns.”
JPM maintained its preference for overweight-rated in Berkeley Group and Persimmon, as well as Taylor Wimpey.
Looking at Crest Nicholson directly, JPM upgraded the stock to ‘neutral’ from ‘underweight’ and said management actions were now “starting to bear fruit”.
Analysts at Liberum upgraded their recommendation for shares of fintech outfit TruFin from ‘hold’ to ‘buy’, highlighting to clients the potential for “strong” revenue growth starting from the 2023 financial year.
Key to that thesis was the extension of the commercial pilot between Lloyds and Satago, TruFin’s business offering working capital finance and technology solutions for small and medium-sized enterprises.
“We believe this is positive as it significantly increases the revenue potential for Satago not only due to the Lloyds relationship but potentially extending the service to other lenders and strategic partners,” they argued.
However, Liberum, which also upped its price target on the stock from 80.0p to 93.0p, the extended scope of the pilot meant that it would now run into early 2022, weighing on group revenues in 2021 and 2022 but come 2023, on the other hand, sales were expected to rise to £35.6m from £20m.
