A Quick Look at AstraZeneca's EPS Forecasts

LONDON -- It's always worth keeping an eye on the earnings forecasts for your favorite companies, especially if you use forward P/E ratios to gauge when to buy and sell your shares.

You never know, if City brokers have been revising their projections of late, your investments may not be as cheap -- or expensive -- as you think!

Today, I'm looking at the earnings per share forecasts for AstraZeneca (LSE: AZN.L  ) (NYSE: AZN  ) , the FTSE 100 pharmaceutical group. All my figures are courtesy of S&P Capital IQ.

The consensus for 2012 is for earnings per share of 371 pence, which puts the 29 pound shares on a lowly forward P/E of 7.8.

However, the estimates suggest earnings may drop to 358 pence per share for 2013 and rebound only slightly to 366 pence for 2014.

Earnings may then advance to 374 pence per share for 2015, only then to slide back to 362 pence per share for 2016, at least according to City analysts.

The data from S&P Capital IQ also indicates AstraZeneca's revenues may stall around the 16 billion pound mark and EBITDA may stagnate around the 6 billion pound mark during the next few years.

All told, the forecasts aren't great, with earnings essentially predicted to go nowhere between 2012 and 2016. But then again, that P/E of 7.8 looks like the market is already expecting earnings won't advance anytime soon.

Whether these projections make AstraZeneca a buy, a hold, or a sell is of course up to you. To put the company's multiple into perspective, the FTSE 100 at 5,842 trades on a P/E of 11.4.

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Maynard Paton does not own shares in any of the companies mentioned in this article. The Motley Fool has a disclosure policy.
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11/21/2014 4:06 PM
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