Goldman Sachs reiterates Buy on AstraZeneca: 2Q26 focus on R&D expenses and Farxiga erosion, with pipeline value undervalued
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Goldman Sachs reiterates Buy on AstraZeneca: 2Q26 focus on R&D expenses and Farxiga erosion, with pipeline value undervalued
Goldman Sachs expects AstraZeneca’s 2Q26 revenue and Core EPS to be slightly below consensus, but believes FY26 guidance can be maintained, the clinical catalyst risk-reward profile is skewed upward, and the recent share-price pullback has been excessive.
- Goldman Sachs’ 2Q26 estimates for total revenue and Core EPS are 1% and 3% below company consensus, respectively, mainly due to Farxiga’s China VBP, US LOE, and Lynparza’s China VBP impact.
- The company is expected to reiterate its FY26 guidance for high-single-digit revenue growth and low-double-digit EPS growth, demonstrating continued resilience in its diversified product portfolio.
- Among 2H26 pipeline catalysts, AVANZAR and SERENA-4 carry higher risk but have low market expectations; Wainua CARDIO-TTRansform and tozorakimab COPD data are viewed as having more positive potential.
- The 12-month price target is lowered by approximately 1% to 16,370p / $217, mainly due to higher SG&A and R&D expense assumptions, partly offset by higher assumptions for Farxiga’s China brand value and elecoglipron’s probability of success.
Report interpretation
Overview
This report is Goldman Sachs’ company research preview ahead of AstraZeneca’s 2Q26 earnings release. Key areas of focus include revenue pressure on Farxiga from China VBP and US LOE, the impact of China VBP on Lynparza, R&D and SG&A expense trends, and the effect of multiple clinical readouts in the second half on valuation and investor sentiment. Goldman Sachs maintains its Buy rating, believing the company’s growth and pipeline potential have been undervalued following recent share-price weakness.
Core views
Goldman Sachs believes AstraZeneca’s 2Q26 results may be slightly below consensus in the short term, but this would mainly reflect identifiable product and expense pressures and would not alter the long-term investment thesis. The company is expected to maintain FY26 guidance, with revenue and EPS growth still above the industry average. Farxiga’s US LOE is a significant headwind, but assets including Enhertu, Wainua, tozorakimab, and elecoglipron, together with the broader pipeline, provide upside optionality. Although AVANZAR and SERENA-4 are high-risk catalysts, market expectations are already low, and any single readout is not essential to achieving the $80bn 2030 revenue target.
Analysis framework
The report compares Goldman Sachs’ 2Q26 forecasts with Company Consensus Data and Visible Alpha consensus, decomposing differences in product sales, revenue, Core Operating Income, Core EPS, R&D, SG&A, and financial expenses; it also updates long-term forecasts based on FX, IQVIA data, sales trends, and clinical-trial results, and derives the price target using a 50:50 blended DCF and P/E methodology.
Methodology notes
The price target is derived from a 50:50 blend of DCF valuation and 2027E P/E valuation.
Goldman Sachs’ DCF valuation is 15,722p per share, based on key assumptions of an 8.0% WACC and a 2.5% terminal growth rate; the multiple-based approach assumes AstraZeneca should trade at 20x 2027E EPS, implying 16,986p per share, resulting in a 12-month price target of 16,370p after blending.
Goldman Sachs’ forecasts are compared with Visible Alpha consensus to identify the sources of earnings differences.
The report compares 2Q26 total revenue, product sales, Core Operating Income, Core EPS, R&D, SG&A, and other metrics to determine that short-term earnings pressure is mainly attributable to Farxiga, Lynparza, R&D, and financial expenses.
Risk-reward is assessed based on clinical-readout probabilities of success, market expectations, and commercial peak-sales opportunities.
The report views AVANZAR and SERENA-4 as high-risk, high-reward catalysts, while taking a more favorable view of the potential positive impact of detailed Wainua CARDIO-TTRansform and tozorakimab COPD data.
Individual stocks are compared with the market and industry peers across four attributes: Growth, Financial Returns, Multiple, and Integrated.
This framework uses standardized rankings of Goldman Sachs’ forecast metrics to generate percentiles, providing context on investment style and relative attributes.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- AstraZeneca (AZN.L)Research subject
- Strengths
- Diversified pharmaceutical portfolio, FY26 revenue and EPS growth expected to exceed the industry average, extensive long-term pipeline assets, and continued support for the $80bn 2030 revenue target.
- Weaknesses
- Farxiga’s US LOE and China VBP create short-term revenue pressure, while rising R&D and SG&A investment constrains margin improvement.
- Comparison
- Goldman Sachs’ FY26-32 total-revenue forecasts are broadly in line with Visible Alpha consensus, while FY33-35 revenue is approximately 4%-10% above consensus; however, FY27-32 operating margins are 59-290bps below consensus.
- Risks
- Clinical-trial failures, weaker-than-expected commercial execution, pricing pressure, intensifying competition, and patent exposure.
- FarxigaCore product and source of short-term pressure
- Strengths
- Goldman Sachs raises its FY26-36 Farxiga estimates by 1%-3%, mainly based on a more optimistic view of its China brand value.
- Weaknesses
- 2Q26 sales expectations are below consensus due to China VBP and US LOE.
- Comparison
- Farxiga and Lynparza are among the main product-level drivers of Goldman Sachs’ below-Visible-Alpha-consensus 2Q26 forecast.
- Risks
- The pace of erosion after US LOE, China VBP pricing pressure, and competition from comparable products.
- EnhertuGrowth product offsetting short-term pressure
- Strengths
- Goldman Sachs’ 2Q26 forecast is 6% above consensus, reflecting optimism about its potential in first-line treatment; the FDA approved the relevant first-line setting in December 2025.
- Weaknesses
- Growth realization still depends on indication expansion, physician adoption, and commercial execution.
- Comparison
- Enhertu is a partial offset to the pressure from Farxiga and Lynparza.
- Risks
- Competing drugs, the pace of indication penetration, and real-world efficacy.
- WainuaKey 2026 clinical catalyst
- Strengths
- CARDIO-TTRansform has highly relevant endpoints in ATTR-CM, and Goldman Sachs believes it offers advantages over existing therapies; consensus’ $4.1bn peak opportunity could be unlocked without requiring statistical significance for the tafamidis-combination subgroup.
- Weaknesses
- Uncertainty regarding efficacy and subgroup interpretation remains ahead of the clinical readout.
- Comparison
- Goldman Sachs is more positive on Wainua than on other high-risk catalysts.
- Risks
- Failure to meet the primary endpoint, disputes over subgroup data, and competition with existing ATTR-CM treatment options.
- TozorakimabCOPD pipeline catalyst
- Strengths
- Goldman Sachs believes the market is underappreciating the detailed data release following positive Phase 3 headline results, with disclosure at the ERS meeting expected to be a key focus.
- Weaknesses
- Investors will focus on cross-trial comparisons with Dupixent, and interpretation may be affected by differences in trial design.
- Comparison
- Goldman Sachs is more positive on detailed tozorakimab data than on AVANZAR and SERENA-4.
- Risks
- Insufficient strength in the detailed data, unfavorable cross-trial comparisons, and weaker commercial positioning than competing drugs.
- CamizestrantBreast-cancer pipeline asset
- Strengths
- SERENA-4 has a larger sample size, and the control arm may be weaker, potentially still supporting a positive readout.
- Weaknesses
- Goldman Sachs lowers the probability of SERENA-4 success from 60% to 50% because the giredestrant persevERA results were read as neutral to slightly negative; potential SERENA-6 launch timing is pushed back due to an extended FDA review.
- Comparison
- AVANZAR and SERENA-4 are both viewed as high-risk, high-reward, but neither is essential to the investment thesis or the 2030 revenue target.
- Risks
- Failure of the SERENA-4 readout, further FDA review delays, peer competition, and commercialization-timing uncertainty.
- ElecoglipronGLP-1 pipeline asset
- Strengths
- Goldman Sachs raises its probability of success from 50% to 60% following the start of Phase 3.
- Weaknesses
- Potential launch is delayed from 2028 to 2029, and elevated bilirubin in Phase 2 may be viewed as a DDI signal.
- Comparison
- The higher probability of success for this asset partly offsets the negative impact on the price target from higher expenses and lower camizestrant assumptions.
- Risks
- Concerns about DDI interactions, delays to subsequent readouts, safety interpretation, and competition in the GLP-1 market.
Key data
- RatingBuyThe rating has been maintained since May 30, 2024.
- 12-month price target16,370p / $217Lowered by approximately 1% from 16,525p / $219 previously.
- Current price14,100p / $189.62Price disclosed on the report cover.
- Implied upside16.1% / 14.4%Based on the London ordinary-share and US dollar denominations, respectively.
- 2Q26 total revenue$15.277bnGoldman Sachs’ estimate is 1% below Visible Alpha consensus.
- 2Q26 Core EPS$2.41Goldman Sachs’ estimate is 3% below Visible Alpha consensus.
- FY26E revenue$63.409bnGoldman Sachs’ forecast is broadly in line with the midpoint of FY26 guidance.
- FY26E EPS$10.20Goldman Sachs’ forecast is broadly in line with the midpoint of FY26 guidance.
- Market capitalization£218.4bn / $289.9bnDisclosed in the report’s Key Data section.
- Enterprise value£229.7bn / $304.9bnDisclosed in the report’s Key Data section.
Impact & implications
In the short term, investors may focus on the resilience of Farxiga and Lynparza revenue after the impact of China VBP and Farxiga’s US LOE, as well as whether SG&A and R&D expenses constrain margin improvement. Over the longer term, Goldman Sachs believes AstraZeneca’s diversified portfolio, 2030 revenue target, and multiple clinical catalysts continue to support the Buy thesis; successful data from Wainua, tozorakimab, or parts of the oncology pipeline could prompt the market to reassess the quality of growth and pipeline value.
Risks
- Clinical-trial failures, particularly disappointing readouts for AVANZAR, SERENA-4, CARDIO-TTRansform, and tozorakimab.
- Faster-than-expected sales erosion for Farxiga after its US LOE or further expansion of China VBP pressure.
- Continued increases in SG&A and R&D expenses, limiting margin improvement and EPS growth.
- Weaker-than-expected commercial execution, including new-product launches, indication expansion, and market penetration.
- Drug-pricing pressure, changes in the competitive landscape, and patent exposure affecting long-term revenue quality.
- Extended FDA review timelines or uncertain regulatory outcomes, particularly regarding camizestrant’s SERENA-6 progress.
What to watch
- AstraZeneca 2Q26 earnings release: 7:00 a.m. UK time on July 27, 2026.
- Whether management reiterates FY26 guidance for high-single-digit total-revenue growth and low-double-digit EPS growth.
- The actual impact of Farxiga China VBP, US LOE, and Lynparza China VBP on 2Q26 revenue.
- SG&A expense trends, the pace of R&D investment, and the credibility of the 2026 margin target.
- Management commentary and readout timing for 2026 clinical catalysts including AVANZAR, SERENA-4, and CARDIO-TTRansform.
- Detailed Phase 3 COPD data for tozorakimab, expected to be disclosed at the ERS meeting from September 5 to 9, 2026.
- Timing of the Elecoglipron Phase 2 DDI-trial readout and interpretation of interaction risks.
- FDA review progress for camizestrant SERENA-6; Goldman Sachs expects a decision may be announced in August 2026.