Astrazeneca Plc (NASDAQ: AZN)

Sector: Healthcare Industry: Drug Manufacturers - General CIK: 0000901832
Market Cap 291.12 Bn
P/B 6.34
P/E 30.97
P/S 5.01
ROIC (Qtr) 12.82
Div Yield % 1.66
Rev 1y % (Qtr) 11.99
Total Debt (Qtr) 32.63 Bn
Debt/Equity (Qtr) 0.71

About

Price action

Investment thesis

Bull case

  • Strong operating cash flow of 15.14B provides robust 0.46x coverage of total debt 32.63B, indicating excellent debt servicing capability and financial flexibility.
  • Robust free cash flow of 12.67B exceeds capital expenditure of 2.47B by 5.13x, indicating strong organic growth funding capability.
  • Operating cash flow of 15.14B provides exceptional 3028x coverage of minority interest expenses 5M, showing strong core operations.
  • Tangible assets of 55.05B provide robust 119.67x coverage of other current liabilities 460M, indicating strong asset backing.
  • Operating cash flow of 15.14B fully covers other non-current liabilities 8.35B by 1.81x, showing strong long-term stability.

Bear case

  • Operating cash flow of 15.14B barely covers its investment activities of (6.54B), with a coverage ratio of -2.31, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (6.54B) provide weak support for R&D spending of 15.05B, which is -0.43x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 15.14B provides thin coverage of dividend payments of (4.97B) with a -3.05 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 8.14B provide limited coverage of acquisition spending of (1.24B), which is -6.56x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 15.50B relative to inventory of 6.59B (2.35 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.

Peer comparison

Companies in the Drug Manufacturers - General
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 LLY ELI LILLY & Co 940.24 Bn 84.66 19.19 42.51 Bn
2 JNJ Johnson & Johnson 656.09 Bn 49.20 10.65 45.80 Bn
3 AMGN Amgen Inc 389.67 Bn 89.91 26.60 54.59 Bn
4 ABBV AbbVie Inc. 363.54 Bn 129.05 16.59 68.74 Bn
5 MRK Merck & Co., Inc. 320.49 Bn 202.84 7.87 41.37 Bn
6 NVS Novartis Ag 304.60 Bn 21.78 5.37 35.46 Bn
7 AZN Astrazeneca Plc 291.12 Bn 30.97 5.01 32.63 Bn
8 NVO Novo Nordisk A S 219.30 Bn 13.62 4.51 20.59 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.77 2.39
EV to Cash from Ops. EV/CFO 20.93 27.43
EV to Debt EV to Debt 9.71 6.41
EV to EBIT EV/EBIT 24.22 29.56
EV to EBITDA EV/EBITDA 16.37 21.95
EV to Free Cash Flow [EV/FCF] EV/FCF 25.01 39.77
EV to Market Cap EV to Market Cap 1.09 1.28
EV to Revenue EV/Rev 5.45 7.09
Price to Book Value [P/B] P/B 6.34 12.10
Price to Earnings [P/E] P/E 30.97 73.51
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.89 0.92
Dividend Payout Ratio % Div Payout % (Qtr) 51.60 65.92
Dividend per Basic Share Div per Share (Qtr) 3.13 2.81
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 38.32 37.42
Interest Coverage Int. cover (Qtr) 7.94 20.26
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -46.41 -9.54
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 69.75 96.72
Dividend Growth (1y) % Div 1y % (Qtr) 5.39 2.18
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 35.58 74.22
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 30.12 29.18
EBIT Growth (1y) % EBIT 1y % (Qtr) 35.31 66.23
EBT Growth (1y) % EBT 1y % (Qtr) 44.42 310.53
EPS Growth (1y) % EPS 1y % (Qtr) 44.87 352.41
FCF Growth (1y) % FCF 1y % (Qtr) 31.34 47.43
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 15.62 8.06
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.51 0.38
Cash Payout Ratio Cash Payout (Qtr) 0.28 0.27
Cash Ratio Cash Ratio (Qtr) 0.24 2.11
Current Ratio Curr Ratio (Qtr) 0.88 6.17
Debt to Equity Ratio Debt/Equity (Qtr) 0.71 -0.40
Interest Cover Ratio Int Coverage (Qtr) 7.94 20.26
Times Interest Earned Times Interest Earned (Qtr) 7.94 20.26
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 33.80 -13.61
EBIT Margin % EBIT Margin % (Qtr) 22.51 -10.56
EBT Margin % EBT Margin % (Qtr) 19.67 -25.71
Gross Margin % Gross Margin % (Qtr) 82.40 64.91
Net Profit Margin % Net Margin % (Qtr) 16.20 -34.99