FEATURE THE IMPACT OF COVID AstraZeneca’s high-profile work on a Covid vaccine represented a departure for the group and one that has not been without headaches. Initially sold at cost, with a pledge to continue this policy in the developing world, the vaccine nonetheless attracted scepticism over its effectiveness and safety, some of which has subsequently been debunked. Given it isn’t an obvious fit with the rest of the business, the idea of spinning off its Covid-related assets has been mooted either through a separate stock market listing of the business division, a sale or joint venture with a vaccine specialist. Covid has had knock-on effects across the whole healthcare system, including a focus on preventative medicine and on the digitisation of healthcare. The use of so-called ‘telehealth’ – delivering health-related services online or over the phone – has, according to consultant McKinsey, increased 38 times on pre-Covid levels and AstraZeneca
is looking to boost its own footprint in artificial intelligence, data science and digital technology. ARE THE SHARES WORTH OWNING? AstraZeneca’s shares are not cheap – they are trading in the region of 20 times 2022 consensus forecast earnings and yielding 2.2%. However, on a long-term view the company is an attractive investment given its strong growth profile. Investors who don’t want to pay a premium rating may wish to look at rival pharmaceutical group GlaxoSmithKline (GSK) which trades on a much cheaper rating of 14 times 2022 consensus forecast earnings. In Shares’ view, both companies would be good stocks to own as part of a diversified investment portfolio.
By Tom Sieber Deputy Editor
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03 March 2022 | SHARES |
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