Astrazeneca Plc (NYSE: AZN)

Sector: Healthcare Industry: Drug Manufacturers - General CIK: 0000901832
Market Cap 324.54 Bn
P/B 6.67
P/E 31.74
P/S 5.53
ROIC (Qtr) 15.53
Div Yield % 1.99
Rev 1y % (Qtr) 4.11
Total Debt (Qtr) 29.62 Bn
Debt/Equity (Qtr) 0.61
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About

Investment thesis

Bull case

  • Strong operating cash flow of 14.57B provides robust 0.49x coverage of total debt 29.62B, indicating excellent debt servicing capability and financial flexibility.
  • Operating cash flow of 14.57B provides exceptional 1821.88x coverage of minority interest expenses 8M, showing strong core operations.
  • Robust free cash flow of 11.78B exceeds capital expenditure of 2.80B by 4.21x, indicating strong organic growth funding capability.
  • Operating cash flow of 14.57B fully covers other non-current liabilities 8.60B by 1.69x, showing strong long-term stability.
  • Cash position of 5.71B provides exceptional 713.88x coverage of minority interest expenses 8M, indicating strong liquidity.

Bear case

  • Operating cash flow of 14.57B barely covers its investment activities of (6.81B), with a coverage ratio of -2.14, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 14.57B provides thin coverage of dividend payments of (4.97B) with a -2.93 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Investment activities of (6.81B) provide weak support for R&D spending of 14.23B, which is -0.48x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 5.71B provide limited coverage of acquisition spending of (1.24B), which is -4.61x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 16.50B relative to inventory of 6.56B (2.52 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 1,096.48 Bn 444.66 53.21 42.50 Bn
2 JNJ Johnson & Johnson 586.00 Bn 21.86 6.22 47.93 Bn
3 MRK Merck & Co., Inc. 351.73 Bn 29.51 8.33 41.37 Bn
4 ABBV AbbVie Inc. 346.46 Bn 41.07 10.17 68.74 Bn
5 AZN Astrazeneca Plc 324.54 Bn 31.74 5.53 29.62 Bn
6 NVS Novartis Ag 322.29 Bn 23.05 5.69 35.46 Bn
7 GILD Gilead Sciences, Inc. 237.69 Bn 78.03 22.28 24.94 Bn
8 AMGN Amgen Inc 233.95 Bn 29.40 9.93 54.60 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 3.06 2.46
EV to Cash from Ops. EV/CFO 23.95 38.77
EV to Debt EV to Debt 11.78 6.68
EV to EBIT EV/EBIT 24.76 37.43
EV to EBITDA EV/EBITDA 17.92 30.58
EV to Free Cash Flow [EV/FCF] EV/FCF 29.63 50.59
EV to Market Cap EV to Market Cap 1.08 1.31
EV to Revenue EV/Rev 5.94 8.62
Price to Book Value [P/B] P/B 6.67 5.91
Price to Earnings [P/E] P/E 31.74 44.84
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.06 0.95
Dividend Payout Ratio % Div Payout % (Qtr) 63.00 65.78
Dividend per Basic Share Div per Share (Qtr) 4.16 2.89
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 54.71 40.65
Interest Coverage Int. cover (Qtr) 8.28 20.38
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -49.65 -17.39
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 4.06 74.29
Dividend Growth (1y) % Div 1y % (Qtr) 39.90 3.76
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 37.70 71.80
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 16.69 65.77
EBIT Growth (1y) % EBIT 1y % (Qtr) 35.20 63.01
EBT Growth (1y) % EBT 1y % (Qtr) 42.71 306.04
EPS Growth (1y) % EPS 1y % (Qtr) 45.37 348.81
FCF Growth (1y) % FCF 1y % (Qtr) 17.87 11.69
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 9.67 7.99
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.51 0.39
Cash Payout Ratio Cash Payout (Qtr) 0.29 0.28
Cash Ratio Cash Ratio (Qtr) 0.19 2.08
Current Ratio Curr Ratio (Qtr) 0.94 6.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.61 -0.39
Interest Cover Ratio Int Coverage (Qtr) 8.28 20.38
Times Interest Earned Times Interest Earned (Qtr) 8.28 20.38
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 33.80 -13.64
EBIT Margin % EBIT Margin % (Qtr) 24.00 -10.45
EBT Margin % EBT Margin % (Qtr) 21.10 -25.59
Gross Margin % Gross Margin % (Qtr) 81.90 65.04
Net Profit Margin % Net Margin % (Qtr) 17.40 -34.87