If, like me, you have the time and inclination to do due diligence, you likely prefer individual stocks. In addition to the potential for outsized gains, individual stock picking gives me a feeling of control over my own destiny.

With that in mind, here are three leading UK stocks to consider for a retirement-focused ISA.

RELX

RELX is an ideal long-term British retirement holding because it delivers stability through recurring subscription revenues (over 50% of income), high margins, and exceptional free cash flow of ~27% of revenue.

The company has grown net income by 8.59% year-on-year, maintains a 20.5% net profit margin, and has increased dividends for 15 consecutive years. Dividend growth is typically in the high-single-digits and the payout ratio is around 62%.

With £2.59bn in annual free cash flow and £2.61bn operating cash flow, its debt load looks manageable, albeit a bit high.

A more pressing risk is the disruptional threat of generative AI, which could change how professionals access information.

AstraZeneca

AstraZeneca (LSE: AZN) is another standout long-term retirement holding to consider. It offers exceptional stability through a diversified oncology-focused drug portfolio, strong cash flow generation, and a disciplined balance sheet.

The company reported FY 2025 revenue of £46.3bn (up 8%), with Q4 2025 revenue rising 4% to £12.2bn. Looking ahead to FY 2026, the pharma giant anticipates mid-to-high single-digit total revenue growth and low double-digit core EPS growth.

The dividend yield isn’t much at just 1.73%, but the payout ratio of only 46% allows room for growth. Its balance sheet shows total assets of £82.3bn against liabilities of £50.5bn, demonstrating financial resilience.

A key risk is patent expirations, including Farxiga (£6bn annual sales) losing exclusivity, which could pressure revenue if pipeline launches don’t offset the decline.

Diploma

Diploma (LSE: DPLM) offers exceptional stability through diversified exposure to three essential industries: life sciences, industrial controls, and safety. It enjoys strong cash generation and enacts disciplined capital allocation.

The company reported strong FY25 numbers: an 11% rise in revenue to £1,524.5m and adjusted operating profit up 20% to £342.7m. It also has excellent operating margins at around 22.5%. Free cash flow was £247.2m with 105% conversion, while leverage is conservative at 0.8 times net debt/EBITDA.

Like AstraZeneca, it’s a growth-focused stock with a low 1.1% dividend yield. But with just a 43.85% payout ratio and 10.78% average dividend growth over three years, it shows promise.

A key risk is acquisition integration and execution, as Diploma’s growth strategy relies on both organic growth and selective acquisitions in competitive markets.

Final thoughts

When looking for stocks to hold for a decade or longer, it’s important to look beyond the headline growth and income figures. A company that’s up 100% in a year is unlikely to maintain that momentum indefinitely. A stock with a 9% yield probably lacks sufficient coverage and will need to reduce payments soon.

Instead, focus on things like diverse income streams, earnings visibility, and recurring revenues. The three mentioned here fit those criteria, but they aren’t alone — there are many other equally compelling options to consider on the UK market.

Should you invest £5,000 in AstraZeneca Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if AstraZeneca Plc made the list?

Mark Hartley owns shares in AstraZeneca, RELX, and Diploma.

The post 3 UK shares to consider holding in a Stocks and Shares ISA for a decade appeared first on The Twelfth Magpie.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

In my case, at least £20,000 a year feels closer to the mark if I want to cover the basics without making serious sacrifices.

The State Pension is currently £12,547 a year. So how much would you need to have in an ISA to make up the difference?

Calculating a comfortable future

To get from £12,547 to £20,000, I’d need another £7,453 a year. Using the recommended 4% retirement drawdown rule, I’d need an ISA worth around £186,325.

That’s a stately sum, but it’s not some fantasy number reserved for the ultra-rich.

So, how long would it take to get there? Consider the following compounding scenarios, using an average annual return of 8%:

• Investing £200 a month, you could hit the target in about 24 years and 7 months.
• £300 a month would take 20 years and 3 months.
• £500 a month could reach it in just 15 years and 5 months.

Although not guaranteed, 8% could be a conservative estimate. A more aggressively growth-focused portfolio could average 10% returns a year (many do). But some will average less, of course.

At that rate, £500 a month could compound to £183,920 in just 14 years. Still a long time, but achievable even for somebody in their 50s with no savings.

What kind of shares could deliver 10%?

A 10% average return isn’t easy, but it’s possible with the right mix of shares. Some FTSE 100 stocks have delivered strong 10-year annualised total returns when dividends are reinvested:

Impressive figures. But remember: past performance is never a guarantee of future results. The lesson is not to chase yesterday’s winners, but to understand why they won in the first place.

Take AstraZeneca, for example.

Long-term earnings visibility

It exhibits several characteristics that support long-term compounding. It combines resilient demand, a deep pipeline, and steady cash generation with a broad portfolio across oncology, CVRM, respiratory and rare disease.

That helps provide both a clear picture of future revenue and reduces risk through diversification.

In 2025, it reported 16 blockbuster medicines and is aiming for more than 25 by 2030. That matters because approved prescription drugs can keep producing revenue for years, sometimes decades.

FY2025 showed total revenue of $58.7bn, up 8%, while earnings per share (EPS) rose 11%. CEO Pascal Soriot said of the results:

“We are firmly on track to deliver our 2030 ambition.”

That sounds like a business built for endurance, doesn’t it? 

Still, it’s not a guaranteed bet. The key threat to any pharmaceutical company is the dreaded patent cliff, and AstraZeneca is no stranger. Farxiga is a key growth driver for AstraZeneca, with $7.7bn in 2024 sales but a patent expiry due this year. 

The bottom line

Passive income in retirement is not as hard as it might seem, but it does take time, discipline and a sensible plan.

A strong portfolio can make a big difference, so stable growth compounders like AstraZeneca are worth looking into as part of a diversified portfolio.

Should you invest £5,000 in AstraZeneca Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if AstraZeneca Plc made the list?

Mark Hartley owns shares in AstraZeneca, HSBC Holdings and BAE Systems.

The post How much would it take to supplement the State Pension up to £20,000 a year through ISA investments? appeared first on The Twelfth Magpie.

According to research by AJ Bell, 63% of all active analyst ratings on UK stocks are currently set to Buy – the most bullish institutional sentiment seen in over a decade. So even with markets near record highs, the experts clearly see plenty of opportunity ahead.

Here are three of their highest-conviction picks.

1. RELX: the data giant

RELX (LSE:REL) is a global information analytics company providing data, tools, and decision support across legal, scientific, medical, and financial sectors.

The long-term bull case is built on RELX’s extraordinary pricing power. Its customers are usually law firms, hospitals, and research institutions that are deeply embedded in RELX’s platforms and have very few credible alternatives. That kind of moat is exceptionally hard to replicate.

The bear case? Some worry that the rapid rise of artificial intelligence (AI) could gradually erode this moat by directly attacking the value proposition of the group’s proprietary datasets. After all, cheaper third-party tools can do a similar job, so why would customers pay a premium?

Luckily, so far, that narrative hasn’t proven to be true, but it’s nonetheless still a risk.

2. AstraZeneca: the global pharma titan powering ahead

AstraZeneca‘s (LSE:AZN) one of the world’s leading pharmaceutical companies, with a blockbuster pipeline spanning oncology, cardiovascular disease, and rare conditions.

Analysts at Citigroup, Barclays, and JP Morgan are all firmly in the Buy camp, with 81% of covering analysts recommending the stock. Why? Because the company might have one of the most impressive drug pipelines in the industry, with multiple late-stage trials that could unlock significant new revenue streams over the coming decade.

Of course, that doesn’t mean success is guaranteed. Drug development is exceptionally expensive and uncertain. And pipeline failures or pricing pressure from government healthcare systems could disappoint investors who’ve priced in significant success.

3. Beazley: the specialist insurer flying under the radar

Beazley (LSE:BEZ) is one of Lloyd’s of London’s leading specialist insurers, covering complex risks including cyber threats, marine, property, and professional indemnity across global markets.

Today, the company’s riding two powerful tailwinds. First, cyber insurance is one of the fastest growing segments in the entire insurance industry. And Beazley’s already recognised as a market leader with deep underwriting expertise that competitors struggle to replicate quickly.

The second tailwind is the higher-for-longer interest rate environment. Thanks to increased income from bonds and other short-duration fixed-income instruments, Beazley’s significant investment portfolio is already generating materially better returns than in previous years. And combined, these factors are boosting profitability from two directions at once.

But like all investments, there are risks to consider, most notably the inherently unpredictable nature of the specialist insurance business.

A major catastrophe or an unexpected surge in cyber claims could result in significant and sudden losses that pressure both the balance sheet and the share price.

The bottom line

These are three very different businesses, but all share a common thread: institutional analysts back them with rare conviction.

For investors wondering which FTSE shares to buy and hold through whatever the next decade brings, this trio looks like a compelling place to start investigating further. But they’re not the only opportunities I’ve got my eye on right now.

The post 3 FTSE shares experts think will lead the next bull market charge appeared first on The Twelfth Magpie.

Double‑digit revenue growth in key divisions, a stream of positive new drug trials, and a burgeoning pipeline all reinforce the company’s long‑term earnings power. Yet the market still seems reluctant to price in the strength of its underlying business.

So where ‘should’ the shares be trading and what are the catalysts that could power such a move?

What’s the stock’s ‘fair value’?

Price and value are different concepts for shares. Price reflects whatever buyers and sellers are willing to agree on at a given moment. But value is determined by the underlying strength and prospects of the business itself.

For long-term investors, that distinction matters because over time market prices tend to move toward a company’s fair value. This is why understanding the gap between the two metrics can be so powerful for building returns.

Discounted cash flow analysis is one of the most rigorous ways to estimate fair value. It projects future cash flows and discounts them back to the present. The greater the uncertainty in those forecasts, the larger the discount applied.

Analysts’ DCF models differ depending on their core assumptions. Using mine — including a 7.2% discount rate — AstraZeneca shares are 44% undervalued at their present £133.95 price.

That suggests a fair value of £239.20 — far above where the shares trade today.

Therefore, if market prices continue to converge toward fair value over time, this could represent a compelling opportunity, if those DCF assumptions prove correct.

What could force the gap to close?

Sustained earnings growth drives price gains for any stock over the long run. A risk for AstraZeneca is any slowdown in the ramp‑up of launches in its key Oncology and Rare Disease divisions.

Another is any regulatory or clinical setbacks across its late‑stage product-testing pipeline. These could delay commercialisation timelines and reduce the visibility of future cash flows.

Nevertheless, analysts forecast its earnings will increase by a strong average of 13.1% a year over the medium term at least.

Its Q1 2026 results saw core operating profit up 12% year on year to $4.25bn (£3.15bn). The number reflected strong demand across Oncology and Rare Disease and continued operating leverage despite higher R&D investment.

Total revenue grew 13% to $15.29bn, highlighting continued uptake of newer medicines and solid contributions from established brands despite ongoing generic pressures.

Consequently, management reaffirmed its full-year 2026 outlook, expecting low double-digit core earnings per share growth. It also reiterated its 2030 target of hitting $80bn in annual revenue.

My investment view

AstraZeneca’s strong and consistent earnings growth should catalyse the closure of the current price‑to‑value gap over time. As newer medicines scale and later‑stage assets reach the market, the company’s cash‑generation profile should become increasingly visible to investors.

Management’s reaffirmed 2026 outlook and its confidence in hitting the 2030 $80bn revenue ambition also provide a clear long‑term roadmap. If those targets continue to be met, the market may re‑rate the shares towards what I think is their fair value.

For investors seeking dependable growth backed by robust fundamentals, that potential convergence makes the stock worthy of serious attention. And it is certainly compelling enough for me to be looking to add to my holding in the firm very shortly.

The post 13% annual earnings growth forecast and 44% under ‘fair value! 1 FTSE 100 gem to buy today? appeared first on The Twelfth Magpie.

Using a Cash ISA to build up an emergency fund isn’t a bad strategy. But trying to build real wealth this way creates a meaningful and unnecessary opportunity cost. Even the very best ISAs offering up to 5% interest today still fall short of the stock market’s 8% long-term average.

So, with that in mind, which UK stocks are the experts buying right now?

AstraZeneca – the UK’s crown jewel

Few companies on the London Stock Exchange attract as much institutional conviction as AstraZeneca (LSE:AZN).

The pharmaceutical giant has transformed itself into a global oncology powerhouse, with blockbuster medicines like Enhertu, Tagrisso, and Calquence driving revenues toward an ambitious $80bn target by 2030.

Even in 2025, the top line expanded by another 9% to a record $58.7bn. And with 20 Phase 3 trials currently under way, the pipeline powering AstraZeneca’s future growth remains pretty impressive.

But risks are real. President Trump’s Most Favoured Nation drug pricing push, which aims to tie US prices to cheaper international rates, could meaningfully squeeze AstraZeneca’s most profitable market.

At the same time, the company is also navigating through an ongoing anti-corruption investigation in China’s pharmaceutical sector. And combined, the group’s position in both of these crucial markets could soon come under pressure.

Unilever – the unsung stalwart

Another top pick from the pros in 2026 is Unilever (LSE:ULVR), which seemingly combines robust growth with solid defensive traits that could help reduce portfolio volatility in an uncertain market environment.

Under CEO Fernando Fernández, Unilever is in the middle of its most dramatic transformation in decades.

Having already spun off its ice cream business in late 2025, the group announced in March 2026 that it would combine its entire food division, which contains brands like Hellmann’s, Knorr, and Marmite, with US spice giant McCormick in a $44.8bn deal.

What remains will be a pureplay beauty, personal care, and home products business built around Power Brands like Dove, Axe, and Domestos – categories that carry higher margins and faster structural growth than food.

However, it’s important to highlight that the McCormick deal hasn’t gone down particularly well with shareholders of both companies. Large-scale mergers are complex and have a habit of incurring lots of unexpected costs. And since Unilever will still retain a 65% equity stake in the newly formed business, weak performance in the future could have knock-on effects.

Even if the deal goes through as planned, there remains the challenge of consumers potentially trading down to cheaper non-branded alternatives to Unilever’s products, limiting the group’s pricing power – a key risk to be aware of.

The bottom line

No stock is ever without risk, even FTSE 100 titans like AstraZeneca and Unilever and I can’t say they’re ‘the best’ to buy today. Yet when weighed against their potential long-term rewards, both companies look like potentially top stocks for investors seeking a more defensive way to grow their wealth that could still outperform a savings account in the long run.

That’s why I think both companies deserve a closer look.

The post With £9,633.30 to invest, are these the best UK stocks to buy now? appeared first on The Twelfth Magpie.

I’m a big believer in that philosophy. After all, I own a share because I think it will rise over time and I already know a lot about the company from my research.

However, Lynch didn’t mean blindly buy more of everything in your portfolio. Valuation also matters. That’s why the star stock-picker also once said: “A correction [or crash] is a wonderful opportunity to buy your favourite companies at a bargain price“.

Putting these two things together then, here are two FTSE 100 stocks I’d like to buy more of at a lower price in a market meltdown.

Oncology leader

The first company is the second-largest on the London Stock Exchange. I’m talking about AstraZeneca (LSE:AZN), the pharmaceutical giant with a £214bn market-cap.

The share price is up 88% in the past five years, with dividends on top.

Yesterday (29 April), AstraZeneca reported a solid first quarter. Revenue was up 8% to $15.3bn and core earnings per share rose 5%. Both beat expectations, while core operating profit jumped 12% to $4.3bn.

The company is a world leader in oncology, which made up 45% of revenue in the quarter. The oncology portfolio grew 16%, driven by blockbuster cancer drugs Imfinzi (+30%), Calquence (+17%) and Enhertu (+34%).

In a win-win for patients and AstraZeneca, the UK has agreed to pay more for new medicines. And the company will invest £300m in expanding existing locations, including a “lab of the future” in Macclesfield.

Looking ahead, CEO Pascal Soriot said the firm was on track to reach its target of $80bn in revenue by 2030, up from $58.7bn last year. It expects to launch 20 new medicines by then.

The key risk is a handful of late-stage clinical trial failures. That could threaten the 2030 target, turning investors away from the stock.

However, the main reason I prefer to wait for a better chance to buy more shares is the valuation. After rising 31% over the past year, AstraZeneca’s trading on a price-to-earnings (P/E) ratio of 28. And the dividend yield‘s quite low at just 1.74%.

Top-class hotel group

The second stock is InterContinental Hotels Group (LSE:IHG). This has been another tremendous performer, doubling in price over the past five years (excluding dividends).

Now, the thing that attracted me to IHG, as it’s known, is the quality and breadth of its brands. At the luxury end, there’s Six Senses, Regent, InterContinental, and Kimpton. Then there’s Crowne Plaza, which is popular with business travellers, and Holiday Inn.

Another thing that I like about IHG is its business model. It operates on an asset-light platform, where the group franchises most of its brands rather than owning the physical hotel real estate.

This strategy has a number of benefits: 

• IHG can grow rapidly with minimal capital investment.
• Earn high-margin fees.
• Return more cash to shareholders because third-party owners bear property maintenance costs. 

Again though, the stock’s trading expensively, at 28 times earnings, while offering a 1.65% dividend yield. With the Middle East wars affecting flights and travel, this valuation probably doesn’t reflect the near-term risks.

However, this is a high-quality compounder I want more of, especially at a bargain price.

The post If the stock market crashes, I’m keen to buy these world-class FTSE 100 shares appeared first on The Twelfth Magpie.

CEO Pascal Soriot told us the company is “on track to achieve our ambition for 2030 and beyond.”

The share price dipped a couple of percent, edging into negative territory year to date. But AstraZeneca is still up 19% over 12 months — and has soared 85% in the past five years. Let’s dig in and see what’s happening…

Double-digit growth

The company reported a 5% rise in core earnings per share. And the board says it expects mid-to-high single-digit revenue growth and low double-digit core EPS growth for the full year.

It’s hard to think of a better example of how a long-term plan can outstrip short-term earnings targets than AstraZeneca. And it’s all thanks to the stunning turnaround Pascal Soriot kicked off when he took on the challenge in 2012. AstraZeneca needed to focus on getting its research pipeline up to strength. And the new boss made it clear it would need time and patience.

As an aside, an investor who put £5,000 into AstraZeneca on the day Soriot became boss would today be sitting on shares worth £23,550, by my calculation.

What’s next?

Looking at these results, I’m struck by one part of what the CEO said.

We are advancing through our catalyst‑rich period, with positive readouts for four high-value Phase III programmes since our last quarterly results, including first pivotal data for two key NMEs – tozorakimab in COPD and efzimfotase alfa in hypophosphatasia.

Expertise in oncology and rare diseases lies behind AstraZeneca’s success. And these new developments, with the boss talking about multiple launches in preparation, convince me the company still has its eye on the ball — and its sights set on long-term growth.

There’s a strategic collaboration with CSPC Pharmaceuticals too, “to advance the development of multiple next-generation therapies for obesity and type 2 diabetes.” AstraZeneca will invest $1.2bn upfront.

Potential pitfalls

An aggressive drug research pipeline is, however, in part a case of running to stand still. We’ll see the expiry of some profitable patents in the coming years, including a handful of blockbusters.

And even an impressive pipeline like AstraZeneca’s is no guarantee that lost blockbuster profits will be replaced. It’s a problem that faces all pharmaceutical companies.

Whether the stock’s high valuation is fair is a tricky question. We’re looking at a forward price-to-earnings (P/E) ratio of close to 24 for the current year. And this is a company with only modest dividend yields — there’s 1.7% forecast for this year.

So what’s the verdict?

The weak reaction to this latest quarter doesn’t surprise me that much, as a company can need to smash expectations to impress growth investors at these levels. And this was largely as expected.

But I think AstraZeneca deserves its premium rating, and I reckon long-term ISA investors should consider it.

The post What next for AstraZeneca shares, after another cracking quarter? appeared first on The Twelfth Magpie.

On top of that, analysts predict a new record for dividends from the top London index this year. They could reach as much as £86bn. And that’s without considering further cash returns from share buybacks.

100% bullish

A look at recommendations for RELX (LSE: REL) shows all 15 out of the 15 brokers I could find with a Buy or Outperform stance on the stock. Those two things essentially mean the same. And their average price target of 3,600p is a full 33% above the price at the time of writing.

RELX went rapidly out of fashion as investors feared the AI revolution could overtake its business, which involves data analytics — specialising in the medical, legal and business sectors.

But at 2025 results time in February, the company reported a 7% rise in revenue, with adjusted operating profit up 9% and earnings per share up 10%. The board lifted the dividend by an inflation-busting 7%.

RELX is in fact using AI to its advantage. CEO Erik Engstrom told us: “The continued evolution of artificial intelligence is enabling us to add more value to our customers, as we embed additional functionality in our products, and to develop and launch products at a faster pace.” He added it “will remain a key driver of customer value and growth in our business for many years to come.“

The AI revolution could also make it easier for competitors to try to steal an edge, so we need to watch for that. But I rate RELX as one to consider for investors looking for real-world profits enhanced by AI.

Earnings growth

AstraZeneca (LSE: AZN) doesn’t inspire quite the same 100% following. But of a list of 24 analysts offering targets, a full 20 of them think we should buy the stock. And only two see it as a Sell.

In this case, we’re looking at a share price that’s had a very solid five years. But that comes on the back of impressive profit growth. Earnings per share (EPS) more than trebled between 2022 and 2025. And analysts predict EPS growth of a further 60% by 2028.

On top of that, they expect net debt to drop from the $23.4bn recorded at the end of 2025, to just $2.4bn over that same timescale.

AstraZeneca has long been on a premium P/E valuation, with a multiple of 26 on the cards for 2026. It could drop to 20 by 2028, which is still above the FTSE 100 long-term average. Would that still be justified? I think a key danger is that the earnings growth cycle might start to fade, and that could drive growth investors away.

Still, we have two stocks here that City analysts think investors should consider buying. I find it impossible to disagree.

The post These are 2 of the hottest FTSE 100 stocks to buy right now, say the experts! appeared first on The Twelfth Magpie.

The good news is that by putting aside as little as £30 a week early on in a career and investing this money in high-quality UK shares, someone can double this income. Here’s how.

Regular stock investments and compounding

On average, the UK stock market generates a return of around 8% a year over the long term. And with trading fees dropping drastically over the last two decades, investing has never been more accessible to the British public, even those earning the Minimum Wage.

But to keep fees as low as possible, it’s often best to put money into an interest-paying savings account each week, and then invest this capital at the end of each month.

For anyone putting £30 aside each week, that translates into an average of £130 available to invest each month. And assuming a portfolio matches the stock market’s average return, then after 40 years of compounding, a total of £453,831 is unlocked.

Following the 4% withdrawal rule, that’s enough to generate an additional retirement income of £18,153. And when combined with the current State Pension, that translates into a total passive income of just over £30,000 – more than double the government provides alone.

Of course, not everyone has 40 years ahead. But by making a few sacrifices to have more money for investments each week, the timeline can be drastically accelerated.

Which stocks should investors buy?

Over the next 20-40 years, the UK State Pension is likely to change. And with concerns about the long-term sustainability of the triple lock, Britons could end up with less support from the government in the future, highlighting why building additional retirement wealth is crucial.

But of course, the next question is, what stocks should investors consider buying?

Most investment advisors often recommend building out a solid foundation of boring but dependable industry giants. And today, AstraZeneca (LSE:AZN) is ranked as one of the most recommended large-cap stocks for long-term investors building a new portfolio.

The biopharmaceutical giant has a vast portfolio of drugs targeting a wide range of diseases. And with management outlining its ambitions to grow revenues from $58.7bn in 2025 to over $80bn by 2030, the firm continues to invest heavily in its development pipeline.

With continuous structural demand for AstraZeneca’s products even during recessions, the business has proven to be remarkably resilient during economic wobbles. And it’s why it’s a popular favourite among both experts and everyday investors.

However, there are still risks. Drug patents eventually expire. And AstraZeneca has a few blockbuster treatments losing their protection in the coming years. That may not be a problem if new treatments replace the lost revenue. But drug development is notoriously challenging and, as such, it’s possible that the business falls short of its targets.

Nevertheless, with a long track record of success, AstraZeneca shares could be worth mulling for investors looking to start building a retirement portfolio that can generate a State Pension-beating passive income.

The post How to try and double the State Pension with just £30 a week appeared first on The Twelfth Magpie.

A decade ago, it was a lumbering, patent‑cliff‑ridden pharma giant. Today it is a high‑growth, oncology‑driven, research‑led machine with global scale and a pipeline that most rivals would kill for.

And from 8 April 2021 to now, a £20,000 holding in the stock would have grown into£44,108 once dividends are included. That is a share price gain of £21,143, plus another £2,965 in dividends, giving a total return of around 121%.

That said, I believe there is still a huge gap remaining between the stock’s price and its ‘fair value’. And experience has shown that share prices tend to converge to this fair value over time.

So, what sort of potential price gains are we looking at?

Strong growth momentum

A risk to AstraZeneca is any delay in the ramp‑up of key oncology launches that could squeeze its earnings. And it is ultimately growth in these that power any firm’s share price higher. Another is any regulatory or clinical setbacks across its late‑stage pipeline that could delay key products’ path to market.

However, analysts forecast that the company’s earnings will grow a very robust 13% a year over the medium term. And these projections look well supported by recent results.

Reported earnings per share (EPS) soared 45% year on year to $6.60 (£5), reflecting strong operating leverage and lower impairment charges. Revenue jumped 9%to $58.7bn, driven by Oncology, Cardiovascular, Renal & Metabolism, Respiratory & Immunology, and Rare Disease. And operating profit rose 9% to $18.49bn, powered by strong performances from Tagrisso, Imfinzi, Calquence and the accelerating antibody-drug cancer medicines portfolio.

Looking ahead, management expects mid‑to‑high single‑digit revenue growth and low double‑digit core EPS growth in 2026. AstraZeneca also reiterated its forecast that it will hit its 2030 target of $80bn in annual revenue.

Where ‘should’ the shares be trading?

In my experience as a former investment bank trader, discounted cash flow (DCF) analysis is the optimal way to ascertain a share’s fair value.

It does this by projecting an underlying business’s future cash flows and then ‘discounting’ them back to today. The more uncertain those earnings are, the higher the return investors demand and the greater the discount applied.

Some analysts’ DCF modelling is more bearish than mine due to the inputs used. However, based on my DCF assumptions — including a 7.2% discount rate — AstraZeneca shares are 38% undervalued at their current £149.07 price.

Therefore, their fair value could secretly be close to £240.44 a share.

And because stocks can trade to their fair value over time, this price-to-value gap suggests a potentially terrific buying opportunity to consider today if those DCF assumptions hold.

My investment view

I believe the market is still underestimating AstraZeneca’s earnings power, driven by the rapid shift into a higher‑growth, innovation‑led business.

With analysts expecting double‑digit profit growth and management guiding to sustained expansion through to 2030, it looks much stronger than the share price implies.

So, I will be adding to my holding in the firm shortly and think it worthy of other investors’ attention.

I also have my eye on other high-growth stocks that look seriously undervalued.

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