When a FTSE 100 giant falls 12% in a year, investors start asking whether the smart money knows something they don’t. AstraZeneca (LSE:AZN) has been one of the market’s most debated large-cap pharma shares, and sentiment has been weakened by a difficult year for it.
Yet on 6 October, Citi raised its target price from £178 to £186 and kept a Buy rating. That’s not the behaviour of a broker that thinks the business is struggling.
So, is it possible the market is pricing it like a company running out of ideas, when the evidence increasingly points the other way?
Why investors are nervous
The bear case is understandable. Pharmaceutical valuations depend on pipelines, patent cliffs, regulatory decisions and clinical-trial outcomes. AstraZeneca shares have fallen roughly 12% year to date, even after some positive clinical developments.
That matters because a single disappointing trial can wipe billions of pounds from expected future sales. Investors aren’t wrong to worry.
Right now, the most immediate patent-cliff challenge is Farxiga. US generic competition began after the dapagliflozin compound patent expired in April 2026, contributing to a 19% fall in Farxiga sales in H1 2026. The larger medium-term concern is a cluster of patents ending between 2030 and 2032, including Tagrisso, Imfinzi, Calquence, Farxiga and Saphnelo.
Tagrisso and Calquence alone generated about $10.8bn of 2025 revenue.
But I think markets often treat uncertainty as permanent. In reality, drug pipelines are constantly re-rated as new data arrives. A failed programme can hurt, but a stronger one can replace it.
What Citi sees
AstraZeneca shares are currently trading around £162, so Citi’s target is about 17% higher. That’s no small jump. When announcing it, the broker increased forecasts for two of the pharma giant’s key developments: Tozorakimab and SERENA-6.
Those upgrades more than offset the removal of forecasts for SERENA-4.
Citi now models peak sales of $7bn for Tozorakimab and $1.1bn for SERENA-6. Clearly, the broker thinks the pipeline is strengthening, not weakening.
A broker raising its target after removing one drug forecast tells me it’s looking at the whole pipeline, not just the latest headline.
There are two near-term catalysts to consider here. The first is the AVANZAR lung-cancer trial, the result of which could move its discounted cash-flow valuation by between -2% and +3%.
The second is Q3 results, due on 30 October. Citi forecasts revenue of $16bn, up 6% in constant currencies, and earnings per share (EPS) of $2.61, up 10% (AstraZeneca reports in USD).
Those are exciting numbers but they’re far from guaranteed, so caution is still sensible. Trial data and quarterly results can move the shares sharply, in either direction.
My verdict
I think AstraZeneca is worth considering, but I wouldn’t buy it based purely on one broker target. I do think the £186 target makes the bearish crowd look too pessimistic, but the patent challenges can’t be overlooked.
Generic launches could bring increasing competition, so it needs its newer oncology, respiratory and rare-disease medicines to replace the lost sales.
That said, Jefferies also maintains a Buy rating, with a £175 target. Not quite as optimistic, but that rating goes back to early September, when the price was only around £116.
Overall, it looks to me like the market may be allowing short-term fear to cloud long-term value so it may be worth considering.
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Mark Hartley owns shares in AstraZeneca.
This story originally appeared on Motley Fool
