Brokers split on AstraZeneca merger talk as shares recover some ground

Brokers split on AstraZeneca merger talk as shares recover some ground

Tue, August 4, 2026 at 5:32 PM GMT+3 2 min read

• AZN +3.78%

Citi has told clients that a large chunk of deal risk is already in AstraZeneca PLC's (LSE:AZN, NASDAQ:AZN) share price after Monday's sharp fall, while Deutsche Bank sees clear parallels with the drugmaker's Alexion acquisition five years ago.

The two notes are the second-day response to a Financial Times report over the weekend that the FTSE 100 drugmaker is in discussions over a merger with US rival Bristol Myers Squibb.

Citi, which maintains a 'buy' rating, said talks would be a surprise for several reasons.

The bank argues AstraZeneca's existing pipeline sets it up to beat its $80 billion revenue target for 2030, deliver 15% compound annual earnings growth from 2027 to 2030, and largely offset patent expiries beyond that.

A deal would likely dilute growth between 2025 and 2030 given Bristol Myers Squibb faces the loss of exclusivity on blockbusters Eliquis and Opdivo in 2028.

Those two drugs account for around $27 billion of expected sales this year, roughly half the company's revenue, meaning substantial synergies would be needed just to stand still.

Citi also flagged potential antitrust problems, since both companies own large oncology franchises including the competing immunotherapies Imfinzi and Opdivo.

Politics is a further complication if AstraZeneca were to use a deal to move its domicile to the United States.

The broker does see some portfolio logic, with overlapping therapy areas aiding synergies and a deal potentially supporting growth after 2030, when the company hits its largest patent cliffs.

With the shares now on 14 times 2027 earnings, Citi believes a good deal of deal risk has been discounted.

Deutsche Bank, which has a 'sell' rating and an 11,500p target, framed the situation as Alexion déjà vu.

Analyst Emmanuel Papadakis said a transaction would closely parallel the 2020 deal: a cost synergy-driven acquisition of a value-rated US peer, partly financed by AstraZeneca's higher multiple, at a moment when its own medium-term revenue targets were looking a stretch.

He noted that the previous $45 billion target for 2023 was ultimately met only because of the Alexion purchase.

The shares bounced 2.4%, or 275p, to 11,774p on Tuesday.