Image source: Getty Images
In recent years, the FTSE 100 hasn’t been renowned for its growth stocks. But they certainly exist. Pharma titan AstraZeneca (LSE: AZN) has grown like fast in the century so far, and is part of the vanguard in propelling the Footsie to a record high of 9,400 as I write.
With a £187bn market cap, AstraZeneca is now the largest FTSE 100 firm and therefore the largest publicly listed company on these shores. The funny thing is, it’s aiming for a lot more growth too. The firm’s goal of $80bn in sales by 2030 would surely mean much more share price appreciation if it’s met.
Is the target of increasing revenues by over 40% in just five years realistic? And is AstraZeneca a stock to consider buying today? Or are the days of calling the Footsie’s numero uno a ‘growth stock’ numbered? Let’s explore.
Stars and stripes
The fortunes of AstraZeneca are becoming inextricably linked with that big country across the ocean. For one, the firm has already announced plans for a dual-listing of its shares on the New York Stock Exchange in the near future. The higher valuations American stocks tend to have could boost the share price.
The links with the US don’t end there however. The latest round of ‘Trump tariffs’ included 100% duty on pharmaceutical products. A disaster for Astra? No, it seems. An exception has been granted for companies investing in the US. That’s a handy loophole for the British firm which is putting $50bn into manufacturing across the pond.
It’s important to note that 43% of its revenues are drawn from America and the target is 50% by 2030. Again, this is part of the revenue-raising targets. The relative health of the US economy compared to other developed countries should help here too.
A buy?
Those are the broad strokes about the 2030 plan, but what are the nuts and bolts? What is AstraZeneca’s actual plan to net another $30bn in revenue?
The answer is that it comes down to innovation. Pharma firms live and die based on their R&D pipeline. Even one blockbuster treatment can transform a company’s prospects. For example, after Danish drugmaker Novo Nordisk produced weight loss drug Wegovy, it became the largest company in Europe by market cap.
Among AstraZeneca’s pioneering treatments is one strategy in the field of oncology, or cancer treatment. The firm is hoping to use a targeted approach to fighti the horrible disease. Success here would be paired with a big market in a global population that grows ever more older.
The flipside of speculative research is that there is plenty of risk if investments in new drugs don’t come off. That growth target is only a goal, not a formality. But on the whole, even though the company is already huge, I do think the massive potential makes this this a stock still worth considering.
