For anyone wondering whether AstraZeneca is still worth considering after its big run or whether the best days are already priced in, this article will walk through what the numbers are really saying about its value.
Despite some short term noise, with the share price roughly flat over the last week at -0.4% and over the last month at -0.1%, AstraZeneca is still up 27.5% year to date and 35.1% over the past year. That builds on a 110.3% gain over five years.
Those gains have been supported by a steady stream of pipeline and partnership news, from oncology and rare disease advances to new collaborations that expand its reach in cutting edge therapies. Together, these updates have reinforced the market view that AstraZeneca is a long term growth compounder, even if sentiment occasionally cools between headlines.
Right now, AstraZeneca scores 3/6 on our valuation checklist. This suggests it looks undervalued on some metrics but not all. Next, we will unpack what different valuation approaches say about the stock and, by the end, explore an additional way to think about its true worth.
The Discounted Cash Flow model estimates what AstraZeneca is worth today by projecting the cash the business can generate in the future and discounting those flows back to the present. It is essentially asking what tomorrow’s cash is worth in today’s dollars.
AstraZeneca generated trailing twelve month free cash flow of about $10.2 billion, and analysts expect this to rise to roughly $19.1 billion by 2029, with further growth extrapolated beyond those formal forecasts using a two stage Free Cash Flow to Equity model. Simply Wall St extends analyst estimates out over 10 years, gradually slowing the growth profile to reflect a more mature business over time.
On this basis, the model arrives at an intrinsic value of $236.97 per share. Compared with the current share price, this implies the stock trades at a 42.8% discount to its estimated fair value, which is a sizable margin of safety rather than a marginal mispricing.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests AstraZeneca is undervalued by 42.8%. Track this in your watchlist or portfolio, or discover 916 more undervalued stocks based on cash flows.
AZN Discounted Cash Flow as at Dec 2025
For established, profitable businesses like AstraZeneca, the price to earnings (PE) ratio is often the most intuitive way to gauge value, because it directly links what investors pay today to the profits the company is generating right now.
Story Continues
In general, faster earnings growth and lower risk justify a higher, or more generous, PE multiple, while slower growth or greater uncertainty should translate into a lower, or more conservative, PE. That is why context matters when deciding what a normal or fair PE should be.
AstraZeneca currently trades on a PE of about 29.92x, which is above the wider Pharmaceuticals industry average of roughly 22.32x and well ahead of its peer group at around 13.00x. Simply Wall St tackles that context problem with its Fair Ratio, a proprietary estimate of what AstraZeneca’s PE should be given its earnings growth outlook, margins, industry, size and risk profile. On this basis, AstraZeneca’s Fair Ratio is 30.88x. This suggests the stock’s premium to peers is largely justified by its fundamentals and growth prospects, and that the current valuation sits close to where it ought to be.
Result: ABOUT RIGHT
LSE:AZN PE Ratio as at Dec 2025
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Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives, a simple way to attach your own story about AstraZeneca to the numbers by tying your assumptions for future revenue, earnings and margins to a fair value estimate you can actually act on.
A Narrative on Simply Wall St links three things together: the company’s story, a financial forecast based on that story, and a resulting Fair Value that you can then compare to today’s share price to decide whether AstraZeneca looks like a buy, a hold, or a sell.
These Narratives are available to everyone in the Community section of the Simply Wall St platform. Millions of investors can quickly see how their view of AstraZeneca’s growth, profitability and risk translates into a concrete valuation that automatically updates as new news, earnings and guidance are released.
For example, one AstraZeneca Narrative on the platform might assume oncology execution and US manufacturing expansion justify a Fair Value near $150 per share. A more cautious Narrative focused on patent and pricing risk could land far lower, showing how two investors can look at the same company, plug in different assumptions, and reach very different yet transparent decisions about what the stock is worth today.
Do you think there’s more to the story for AstraZeneca? Head over to our Community to see what others are saying!
LSE:AZN 1-Year Stock Price Chart
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include AZN.L.
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