AstraZeneca has added more than 1% after a long term City seller turned more positive.
The company's shares have climbed 30p to £28.29 as Naresh Chouhan at Liberum Capital advised switching to the company from rival GlaxoSmithKline, down 19p to £14.51. Chouhan said:
We believe Astra is primed for a turnaround and could deliver as much as 95% total shareholder return over the next five years.
Conversely, we believe Glaxo will struggle to deliver significant margin expansion and likely disappoint versus forecasts. Moreover, since Glaxo's 2011, outer-year earnings per share forecasts have fallen sharply but the share price has not yet reflected this. We had been long-term sellers of Astra and buyers of Glaxo but now believe that trade has finished and it is time to increase Astra stakes using Glaxo to fund it.
On Wednesday Astra announced its partnership with US group Merck for Nexium and Prilosec would be extended until 2014. Previously it was due to end in September this year.
Astra has also been tipped for acquisitions. It is said to be one of a handful of companies in the bidding for diabetes specialist Amlyin, and has also been named as a possible predator for Shire, following the latter's share price fall in the wake of increased competition for its hyperactivity drug Adderall.
