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Shares in FTSE 100 pharmaceuticals giant AstraZeneca (LSE: AZN) have climbed an impressive 22% in the three months to 20 October 2025.
That means the stock has outpaced the broader Footsie over that period. Is it still one for investors to consider buying?
Recent share price moves
The share price recovery began after AstraZeneca reached a deal with the Trump administration in late September, effectively removing the threat of steep US import tariffs on foreign-made medicines.
Under the agreement, the company will expand its US manufacturing footprint with a new $4.5bn (£3.4bn) facility in Virginia and implement modest price adjustments across some of its Medicaid portfolio.
In return, the company has secured exemption from the previously proposed 100% tariffs that had loomed over the sector for months and worried investors.
The move forms part of the company’s wider $50bn (£37bn) US investment plan, which includes commitments to research, development, and production across multiple states.
The deal not only eliminates a significant policy risk but also strengthens its relationship with the US government at a time when domestic manufacturing is politically prized.
Markets viewed the outcome as a major win for the company, with investors clearly buying into the story of long-term potential in the lucrative US market.
Operational momentum
While the political backdrop has helped, the company’s underlying operations also remain solid with guidance for high single-digit revenue growth and low double-digit earnings per share growth for 2025.
Strong demand across oncology, respiratory, and rare diseases continues to underpin performance. Recent late-stage trial data has reinforced confidence in the firm’s antibody drug conjugate (ADC) pipeline.
It seems to me that these developments have reassured investors that the business can continue to deliver growth even amid regulatory uncertainty.
Valuation
Following its sharp climb in recent months, the company’s shares are trading at a forward price-to-earnings (P/E) ratio of 17 as I write.
By comparison, rival GSK has also enjoyed a strong quarter, up roughly 21% over the same period, but still trades around nine times forward earnings with a dividend yield approaching 4%.
On valuation grounds alone, GSK appears more attractive, particularly for income-focused investors. However, AstraZeneca’s deeper pipeline, stronger oncology franchise, and growing US footprint arguably justify the higher multiple.
Potential risks
Despite the progress, some risks remain. The pricing concessions agreed under the US deal could weigh modestly on margins, and further government negotiations could increase future cost pressure.
Scientific and manufacturing risks also persist. The company’s complex ADC therapies and biologics depend on continued clinical success and supply chain reliability. Any setback could disrupt earnings momentum and spook investors.
Foolish takeaway
The company’s recent 22% surge reflects more than just market enthusiasm with the company clearing a major political hurdle and opening up future growth possibilities.
For investors seeking steady exposure to global healthcare innovation, I think AstraZeneca is worth considering despite the risks.
It does come at a premium to the likes of GSK and with a lower dividend to boot, but I look at it as a strong name with a clear strategy that could justify that multiple.
