Value
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.8 |
| P/S | 7.2 |
| EV/EBITDA | 3.2 |
| Fwd P/E | 7.6 |
| PEG | 5.7 |
| Analyst target | 4.0 |
- ▸Forward P/E: 16.2x
- ▸PEG: 1.32
AZN · Why this verdict
Why AstraZeneca (AZN) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictHOLD
Overall score6.0/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
AstraZeneca is a high-quality pharma with a wide moat, 18% margins and strong momentum, but the price of $186.65 is 3.7% above the $179.79 analyst target and RSI is overbought at 80. Cash conversion is only 51% of net income, so the setup favors holding over adding.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
AstraZeneca has a wide economic moat, strong margins of 18% and a Piotroski score of 8/9, with gross and operating margin components at the maximum 10/10. Quality breakdown | Margins should hold near 18% and the Piotroski score at 8 or higher over the next 12 months. | ↑Improving |
| CounterThe Rule of 40 reads 16 (fail), showing limited growth for the margin level, and patent expiries can compress pharma margins quickly. | ||
The price of $186.65 is 3.7% above the $179.79 analyst target, with 15.0% downside to the stop, a negative reward-to-risk of -0.24. Estimated upside | Analysts should raise targets above $190, or the price should drift back toward the target. | ↑Improving |
| CounterPositive news sentiment (+0.49) and a wide moat could keep analysts chasing the price higher. | ||
RSI is overbought at 80 with extreme positive news sentiment (+0.90) and an extreme gap up of 5.3% that may pull back. Bear case | RSI should cool below 65 without losing the 200-day average. | ↓Deteriorating |
| CounterMACD, on-balance volume and volume scores are all strong, showing broad accumulation that could sustain the move. | ||
Earnings quality shows a warning, with free cash flow at only 51% of net income, below the level needed to fully support earnings. Quality breakdown | Free cash flow should recover above 80% of net income as working capital normalizes. | ↑Improving |
| CounterPharma free cash flow is lumpy because of milestone payments and capital spending, so a single-period ratio may understate cash generation. | ||
The stock trades at a forward P/E of 16.5x with a PEG of 1.32 and growth components of 4.2/10 for revenue, a moderate valuation for moderate growth. Valuation breakdown | Earnings growth should keep the PEG near or below 1.3 over the next 12 months. | ↓Deteriorating |
| CounterA PEG above 1.0 with price above the analyst target leaves little margin of safety if growth slows. | ||
AstraZeneca has a wide economic moat, strong margins of 18% and a Piotroski score of 8/9, with gross and operating margin components at the maximum 10/10.
↑ImprovingQuality breakdown
- Expectation
- Margins should hold near 18% and the Piotroski score at 8 or higher over the next 12 months.
CounterThe Rule of 40 reads 16 (fail), showing limited growth for the margin level, and patent expiries can compress pharma margins quickly.
The price of $186.65 is 3.7% above the $179.79 analyst target, with 15.0% downside to the stop, a negative reward-to-risk of -0.24.
↑ImprovingEstimated upside
- Expectation
- Analysts should raise targets above $190, or the price should drift back toward the target.
CounterPositive news sentiment (+0.49) and a wide moat could keep analysts chasing the price higher.
RSI is overbought at 80 with extreme positive news sentiment (+0.90) and an extreme gap up of 5.3% that may pull back.
↓DeterioratingBear case
- Expectation
- RSI should cool below 65 without losing the 200-day average.
CounterMACD, on-balance volume and volume scores are all strong, showing broad accumulation that could sustain the move.
Earnings quality shows a warning, with free cash flow at only 51% of net income, below the level needed to fully support earnings.
↑ImprovingQuality breakdown
- Expectation
- Free cash flow should recover above 80% of net income as working capital normalizes.
CounterPharma free cash flow is lumpy because of milestone payments and capital spending, so a single-period ratio may understate cash generation.
The stock trades at a forward P/E of 16.5x with a PEG of 1.32 and growth components of 4.2/10 for revenue, a moderate valuation for moderate growth.
↓DeterioratingValuation breakdown
- Expectation
- Earnings growth should keep the PEG near or below 1.3 over the next 12 months.
CounterA PEG above 1.0 with price above the analyst target leaves little margin of safety if growth slows.
Per-dimension breakdown
Quality
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 7.5 |
| ROA | 5.7 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 8.8 |
| Current ratio | 4.0 |
| FCF quality | 4.1 |
| Moat | 7.6 |
| Rule of 40 | 3.0 |
| Piotroski F | 8.9 |
- ▸Strong margins: 18%
- ▸Earnings quality warning: 51% FCF/NI
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
5.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.2 |
| EPS growth | 6.7 |
Momentum
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.2 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 4.7 |
- ▸Overbought (RSI 77)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.6 |
| Analyst rating | 7.1 |
| Price target | 6.8 |
- ▸LLM news sentiment: +0.32 (n=9)
Insider
5.3/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.6 |
- ▸Negligible insider buying — $3,211 (0.000% of mkt cap)
Peer rank
5.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.9 |
| quality rank | 5.9 |
| growth rank | 5.0 |
Technical
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.8 |
| support resistance | 1.3 |
| 52w position | 7.6 |
Risk (lower is worse)
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.9 |
| days to cover | 9.8 |
| volatility | 6.2 |
| put call | 0.0 |
| implied vol | 7.5 |
| max pain risk | 3.0 |
| beta | 10.0 |
| debt equity | 7.0 |
- ▸Elevated put/call: 2.00
- ▸Above max pain $110
Catalyst
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 2.3 |
| dividend safety | 4.8 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- MOMENTUM:7.6>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:97d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.1=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.15
Upside
-2.2%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:7.6>=5.5. Top dim: Momentum at 7.6; weakest: Technical at 3.2. No conviction either direction.
The strongest dimensions are Momentum at 7.6, Quality at 7.0, and Sentiment at 6.9; the weakest are Technical at 3.2, Catalyst at 5.3, and Insider at 5.3. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.15 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Wide Moat Strong Margins
Trip ifOperating margin falls below 14% from current level of roughly 18%.
- P2Price Above Analyst Target
Trip ifPrice stays more than 8% above the analyst target from current 3.7% above.
- P3Overbought Euphoria Risk
Trip ifRSI falls below 50 from current 80 while price drops below the 200-day average.
- P4Weak Cash Conversion
Trip ifFree cash flow to net income conversion rises above 80% from current 51%.
- P5Modest Growth Valuation
Trip ifPEG ratio rises above 2.0 from current 1.32.