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AstraZeneca PLC (AZN) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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AstraZeneca PLC (AZN)

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Intrinsic Value (DCF)

Current$94.51
→
Intrinsic$58.43
-38%
$36.53$58.43$101.98
Market implies 29% growth for 5 years
Current price reflects execution expectations above 17% growth — not unreasonable for quality businesses.
At $95, the market prices in continued strong cash flow growth (29%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $37 → Bull $102. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →13%15%17%19%
8%$75$82$90$98
10%$49$53$58$64
12%$35$38$42$46
14%$26$29$32$35

Bull Case

  • Bull case ($102) offers 8% upside at 21% growth, 8% discount

Bear Case

  • Bear case ($37) implies 61% downside at 14% growth, 12% discount
  • Price reflects 29% growth expectations vs 17% historical — high bar to clear
  • Trading 38% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection

Year 1$8.53B
Year 2$10.00B
Year 3$11.73B
Year 4$13.76B
Year 5$16.13B
Terminal$255.64B

📐 Model Inputs

Growth Rate17.3%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$7.28BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is AZN stock undervalued or overvalued?
🔴 OVERVALUED

AZN trades at $94.51 vs. our DCF-derived intrinsic value of $52.75, implying -44% downside. Using a 9.5% WACC and 17.3% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($82.06) suggests limited upside.

What is AZN's intrinsic value?

Using a 5-year DCF model: Base FCF of $7.28B, projected at 17.3% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $24.63B net debt and dividing by 3.13B shares: Bear $32.75 | Base $52.75 | Bull $82.06. Current price $94.51 implies -44% to base case.

How is AZN's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 17.3% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($189.53B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 26.1x.