Is AstraZeneca PLC (AZN) overvalued?
On Equity Rank's model estimate, AZN trades close to its fair value (6% below it). AstraZeneca PLC (AZN) last closed at $186.43; the multi-method model fair value is $198.00.
| Price | Model fair value | Price vs model |
|---|---|---|
| $186.43 | $198.00 | 6% below |
What the answer rests on
- 4 of 10 valuation methods put AZN's value above its price and 6 put it below, so the methods disagree.
- To justify today's price, AZN's free cash flow would need to grow about 3.4% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 6.2% a year.
- AZN trades at 26.7 times its last year's earnings, against a median of 29.6 for 14 profitable Drug Manufacturer companies.
- Over the past year the price sat below the model fair value on 37% of trading days. The gap ranged from 14% below to 23% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind AZN's fair value · What prices assume · Other companies