AstraZeneca PLC (AZN) Stock Too Hot to Handle

Analysts at Jefferies, assumed coverage of AstraZeneca PLC (NYSE:AZN) with Hold recommendation, according to their opinion released on December 11. Analysts at Jefferies downgraded the stock to a Hold call from its previous Buy stance, in a research note that dated back to August 16.

By watching the trading activity of corporate insiders, it will become easier to get a sense of AstraZeneca PLC (NYSE:AZN)’s prospects. The earliest insider trade took place on 11/12/2014. Astrazeneca Plc parted with a total of 2 million shares of company at average share price of $17. The total for the sales was set at $34 million. After this transaction, the 10% Owner account balance stood at 4.25 million shares. The stock grew 117.35 percent since that insider sale.

AstraZeneca PLC (AZN) is expected to jump by 16.48 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $53.79-month high price target. This represents a whopping 45.58 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $41.66, which represents a return potential of 12.75 percent when compared to the closing price of the stock of $36.95 on Friday, January 11. The lowest price target for the stock is $26.66 — slightly more than -27.85 percent from AZN’s current share price.

The shares are currently floating around the first support level of $36.64. Below this, the next support is placed in the zone of $36.34. Till the time, the AZN stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 37.58 on daily chart, which may remain a cause for comfort. If the price breaks below $36.34 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $37.5 mark may result into a pull-back move towards $38.05 level.

AZN shares dropped -1.31 points or -3.42 percent on Friday to $36.95 with a heavy trade volume of 5.394 million shares. After opening the session at $37.67, the shares went as high as $37.74 and as low as $36.885, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $96 billion and now has 2.6 billion shares outstanding. AstraZeneca PLC (AZN) stock has lost -4.42 percent of market value in 21 trading days.

AZN stock has a trailing 3-year beta of 0.58, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $0.97 a share in the trailing twelve months. The stock’s value has fallen -2.71 percent year to date (YTD) against a rise of 4.76 percent in 12 month’s time. The company’s shares still trade -11.55 percent away from its 1-year high of $41.78 and 13.03 percent up from 52-week low of $32.69. The average consensus rating on the company is 1.7, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.

Shares of AstraZeneca PLC (AZN) are trading at a P/E ratio of 22.42 times earnings reported for the past 12 months. The industry AZN operates in has an average P/E of 31.12. Its P/E ratio went as low as 9.58X and as high as 72.15 over the 5-year span. Further, it is sporting a 4.47 on the Price-to-Sales ratio. Compare this with the industry average P/S of 4. 79.5 percent is the gross profit margin for AstraZeneca PLC and operating margin sits at 14 percent. Along with this, the net profit margin is 11.3 percent.