Today, Jefferies takes a bit of a different tack. It upgrades AstraZeneca (AZN +2%) to "Buy" based on the expectation that management's greed in preserving its bonuses will motivate the team to do whatever is necessary to prop up earnings. Apparently, its bonus plan specifies that the company's dividend must be 1.5 times covered which implies a floor EPS of $4.20. Earnings will come under pressure for the next three years due to patent expirations and the timing of regulatory approvals for pipeline products so executives will have to cut costs or make acquisitions to deliver enough earnings for them to receive their payouts. To demonstrate his/her confidence that management has a keen eye on the bonuses, the analyst's EPS forecast is 10% above consensus for 2015 - 2017. AZN executives would probably describe the situation differently considering the expectation that they employ a long-term view and act in shareholders' best interest. We all know we have a bloated sales force. We all know a minimum of 50% of all calls are false. We all know metrics drive this sales force. Well folks please read the article. This gives a "fresh reason" why senior management will have to cut costs. To me it's a no brainer. To senior management it's bonus money in their pockets. Next 12 months will be a very bumpy ride for sales.
The next 2-3 years are going to be a hellhole for anyone left here. No growth until late 2017 IF our pipeline hits - and we all know our track record with pipelines.
AZ executives are about as interested in the future of the company as politicians are interested in the future of the country. The only difference is that AZ knows that it cannot go on forever the way things stand.
Excellent insight OP. I appreciate the thought process you put in to this. Bloated sales force is an understatement. As soon as they announce the 20- 30 % reduction in sales force. the stock will jump and they will cover themselves. When will the cuts happen??????
I would get rid of FWA first! These girls are a complete waste. Go have babies on someone else's dime! I can't believe you actually work a part time part time job. And no...that's not a typo.
AZ has more reps than many companies combined. So, mgt. needs to cut approx. 2,000 reps from the apron strings, god knows they don't do much, as docs have a closed door policy...get with program and dump these UN-needed reps.
I think they will cut more than 2000. Figure for every 100 reps cut they will cut about 12 dsm's. This makes sense on so many levels. I don't have any idea what they are waiting for? I'm at the point I raise my hand and retire. It can't happen soon enough for me.
AZ love us! They will hire for EVERY vacancy! EVERY SINGLE VACANCY! There will be no layoffs, only expansions. WE ARE THE SALES PHARMA GODS AND BULLET PROOF!
hiring freeze now. At least in certain areas. Expect some sales divisions to be cut up to 50%. Think those that trip over each other every day.
Hiring freeze? They keep hiring for open spots in my area, just because they are open, not because we need them. Is BJ the fool who has made all these bad moves or someone else?
