AstraZeneca Credit Rating Downgraded by Analysts

The A credit rating reflects the negative moat trend that surrounds its wide moat in the pharmaceutical industry and its weak balance sheet relative to other large pharmas

Morningstar Credit Committee 3 December, 2015 | 11:00AM
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We are downgrading our credit rating for AstraZeneca (AZN) to A because of its recent increase in debt leverage and its weak growth prospects. Those weak prospects and the firm’s dividend commitment may make it difficult for the firm to deleverage in the next few years. The firm’s rating outlook is stable.

Weak profit growth puts AstraZeneca near the bottom of the pack in the large pharmaceutical industry

Our A credit rating reflects the negative moat trend that surrounds its wide moat in the pharmaceutical industry and its weak balance sheet relative to other large pharmaceutical peers. Like most other large drug firms, we believe the company operates with a wide economic moat based on patent protection, an entrenched salesforce, and economies of scale.

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