Should I buy AstraZeneca shares on vaccine news?

first_img See all posts by Roland Head Roland Head | Monday, 23rd November, 2020 | More on: AZN Roland Head has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Simply click below to discover how you can take advantage of this. The AstraZeneca (LSE: AZN) share price fell slightly this morning, despite good news on the firm’s Covid-19 vaccine. Trials suggest the vaccine is up to 90% effective and AstraZeneca says it will apply for regulatory approval to start deploying the vaccine.The vaccine isn’t the only new product in AstraZeneca’s portfolio. Sales of new medicines rose by 34% to nearly $10bn during the third quarter of the year. Should I be buying the shares, or do share price gains mean that a more cautious attitude makes sense?5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Vaccine successAstraZeneca shares spiked to a record high of £87 in July, when the company said phase one and two trials showed a good response to the vaccine. The firm has now released interim results from the large-scale phase-three trial of the AZD1222 Covid-19 vaccine. This has been developed in partnership with scientists at Oxford University.The phase-three trial results show that the vaccine is 90% effective if it’s given as a half dose followed by a full dose at least one month later. Other dosing regimens were less effective, but the average achieved was 70%.It seems like a good result to me. The firm is now applying for regulatory approval to start deploying the vaccine. The company has experience of large-scale manufacturing and says the vaccine can be stored in normal fridge temperatures for extended periods. This should make it easier to deploy than the Pfizer vaccine, which needs unusually cold storage.Shareholders won’t benefit from the Covid-19 vaccine directly, as AstraZeneca has already said it won’t profit from the vaccine during the pandemic.However, the rapid development of this new product suggests to me AstraZeneca’s all-important R&D division is performing well. This vaccine success also seems to support the group’s strategy of linking with many smaller external partners on new products.New medicine sales growthAstraZeneca’s recent third-quarter results confirm that newer products are making an increasing contribution to the group’s sales. Total sales for the first nine months of 2020 rose by 9% to $18,879m. But sales of new medicines climbed 34% to $9,894m. This means new medicines have generated more than half the group’s sales this year.This result looks like evidence that chief executive Pascal Soriot’s strategy of investing heavily in new products is starting to pay off. Sales were in decline until 2018, but are now growing steadily again.Investors have backed Soriot’s judgement and AstraZeneca shares have risen by 80% over the last five years. I want to increase my exposure to the healthcare sector, but is it too late to buy?AstraZeneca shares: my verdictI should probably have bought AstraZeneca shares when they were trading at around £40 five years ago. But now that the stock is hovering around £82, can it still deliver attractive returns?As things stand, the shares are trading on about 27 times 2020 forecast earnings. City analysts expect profits to rise by 25% in 2021, which would push the price/earnings ratio down to 22.At this level, I think a lot of growth is already priced into AstraZeneca stock. I don’t think the shares offer much of a safety margin. Any disappointment could knock the valuation, in my view. If I already owned the shares, I’d probably sit tight. But I think I’ll find better opportunities to buy in the future. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Should I buy AstraZeneca shares on vaccine news?center_img I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. 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