NEW YORK (TheStreet) -- Shares of AstraZeneca Plc (AZN) - Get Astrazeneca PLC Sponsored ADR Report are slightly higher in active trading as the London-based biopharmaceutical company considers strategic options to thwart a takeover by Pfizer (PFE) - Get Pfizer Inc. Report, according to the Financial Times.
The company is considering selling the rights to some of its future revenues in a move that would boost its cash reserves, as it works with bankers to explore the sale of future income streams from some of its existing medicines, sources told the FT.
That would bring in billions of dollars in cash which could be returned to shareholders or used to fund R&D. It would also make the company less attractive to Pfizer, by denying it access to some future revenues in the event of a takeover, the FT said.
TheStreet Ratings team rates ASTRAZENECA PLC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ASTRAZENECA PLC (AZN) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- AZN's revenue growth has slightly outpaced the industry average of 5.3%. Since the same quarter one year prior, revenues slightly increased by 0.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The current debt-to-equity ratio, 0.48, is low and is below the industry average, implying that there has been successful management of debt levels.
- The gross profit margin for ASTRAZENECA PLC is currently very high, coming in at 90.79%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, AZN's net profit margin of 7.66% significantly trails the industry average.
- Compared to its closing price of one year ago, AZN's share price has jumped by 45.23%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- ASTRAZENECA PLC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, ASTRAZENECA PLC reported lower earnings of $2.04 versus $4.94 in the prior year. This year, the market expects an improvement in earnings ($4.23 versus $2.04).
- You can view the full analysis from the report here: AZN Ratings Report