AstraZeneca Q4 preview: Where next for the AstraZeneca share price?

When will AstraZeneca report Q4 earnings?

AstraZeneca will publish fourth quarter and full year earnings for 2021 on the morning of Thursday February 10.

AstraZeneca Q4 earnings preview

Analysts forecast AstraZeneca will report quarterly revenue of $10.9 billion in the final three months of the year, up almost 47% from $7.4 billion the year before. Core EPS is expected to jump 46% year-on-year to $1.56 from $1.07, but reported EPS at the bottom-line is anticipated to fall 7.6% to $0.72 from $0.78.

AstraZeneca has introduced numerous catalysts in 2021, predominantly the introduction of its Covid-19 vaccine and the bumper $39 billion acquisition of Alexion Pharmaceuticals. Both started to reap rewards in the last quarter, having completed the takeover in July and booked its first profitable sales of its Covid-19 vaccine, having originally sold its jab at cost.

If the company meets its own guidance, then we should see annual revenue in 2021 rise by a mid-to-high twenties percentage or by a low-twenties percentage when its Covid-19 jab is excluded. Core EPS is guided to come in between $5.05 and $5.40, which would be up from $4.02 in 2020.

Alexion has bolstered AstraZeneca’s portfolio of drugs targeting rare diseases, a lucrative area which immediately provided a $1.3 billion boost to sales in the last quarter. AstraZeneca has said ‘rare disease is a high-growth area with rapid innovation and significant unmet medical need’.

AstraZeneca said in the last quarter that it was ‘now expecting to progressively transition the vaccine to modest profitability as new orders are received’. Still, sales in the fourth quarter will be a blend of original non-profit orders and newer, for-profit orders. The question for investors will be how financially rewarding its jab will be going forward and how vaccination programmes will evolve now that some countries are entering their fourth-round of boosters. AstraZeneca has already warned investors to expect ‘variations in performance between quarters’ as a result and that profitability will be ‘far lower’ than its rival Pfizer, which has seen a significant uplift in profits thanks to the popularity of its jab.

The company is forecast to report just over $1.0 billion worth of vaccine sales for a second consecutive quarter this week, but analysts see this dropping down to $623 million in the first quarter of 2022 and that annual jab sales this year will be just over half what it sold in 2021. Notably, AstraZeneca, which did not boast much of an expertise in vaccines before the pandemic erupted, confirmed in November that is spinning-off its vaccines and antibody therapies into a separate division to allow management to focus on more profitable areas of the business such as oncology.

Elsewhere in the business, AstraZeneca’s biggest division focused on oncology is expected to see growth accelerate to just shy of 22% year-on-year in the fourth quarter from the 17.5% delivered in the third, when sales of its best-selling drug Tagrisso disappointed. Sales of cardiovascular drugs are forecast to slow to 12.5% in the fourth from over 16% in the third, while revenue from respiratory and other drugs are set to come in lower than the year before.

The outlook for 2022 will be closely-watched to see if it meets market expectations, with analysts currently believing AstraZeneca can deliver 19.5% revenue growth in 2022 to $43.1 billion and 29% growth in core EPS to $6.68. Importantly, AstraZeneca’s growth in the first half of 2022 should be stronger than the second, when it will start to come up against tougher comparatives once it celebrates its first full year of owning Alexion.

Where next for AstraZeneca stock?

AstraZeneca shares peaked in November at an all-time high of 9,523p but have lost over 11% in value over the past three months to trade at 8,324p today.

Sellers managed to push the stock to as low as 8,092p in December but this emerged as a level of support that attracted buyers back into the market on several occasions, while the 2022-high of 8,897p has acted as the ceiling for the stock on two occasions last month. We need to see shares breakout of this channel to signal where it will head next.

A potential early signal could come from the 50-day sma, which remains on the cusp of possibly crossing below the 200-day sma after falling below the 100-day sma last month. That would be a new bearish signal that would be reinforced by the bearish RSI. If the stock breaks below the 8,092p floor then the door is open to the next level of support of 7,873p seen back in June 2021.

On the flip side, if shares can recapture the moving averages and break above the 8,897p ceiling then it can first target the 9,011p level of resistance that emerged in September and October before eyeing the all-time high. The stock closed at a record high of 9,450p on three occasions in November so finishing a trading session above here would be more significant than a brief move above the intraday high of 9,523p hit on November 5.

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