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Pfizer (PFE) Down 3% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Pfizer (PFE - Free Report) . Shares have lost about 3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Pfizer due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Pfizer’s first-quarter results were better-than-expected as it beat estimates for both earnings and sales.
Pfizer reported first-quarter 2021 adjusted earnings per share of 93 cents, which comprehensively beat the Zacks Consensus Estimate of 79 cents. Earnings rose 47% year over year.
Revenues came in at $14.6 billion, which beat the Zacks Consensus Estimate of $13.5 billion. Sales rose 45% from the year-ago quarter on a reported basis and 42% on an operational basis mainly driven by sales of COVID-19 vaccine, BNT162b2. The vaccine contributed $3.5 billion in global sales in the quarter. Excluding revenues from BNT162b2, sales grew 8% operationally, in line with the company’s goal of delivering at least 6% compound annual growth rate through 2025.
In addition, higher sales of brands like Eliquis, Vyndaqel/Vyndamax, Inlyta, Xtandi and Xeljanz and higher biosimilars revenues drove sales growth. Weaker sales of Prevnar 13, Ibrance and Chantix in the United States and Enbrel internationally partially offset the increase.
Additional selling days in the quarter also benefited sales, partially offset by non-recurrence of COVID-related customer stocking benefit in the year-ago quarter.
International revenues rose 46% to $6.98 billion. On an operational basis, international sales rose 40% in the quarter. U.S. revenues rose 44% to $7.6 billion. While currency benefited sales by 3%, pricing had a negative impact of 5% on sales.
Adjusted selling, informational and administrative (SI&A) expenses rose 7% (operationally) in the quarter to $2.7 billion. Adjusted R&D expenses rose 19% to $2.0 billion due to costs related to development of COVID-19 vaccines and antiviral medicines.
Segment Discussion
Oncology revenues increased 16% (on an operational basis) to $2.86 billion. Vaccine revenues were $4.89 billion versus $1.6 billion in the year-ago quarter. Internal Medicine rose 10% to $2.59 billion. The Inflammation & Immunology franchise rose 7% to $1.07 billion. The portfolio of Rare Disease rose 25% to $824 million. Hospital sub-segment’s sales rose 10% to $2.34 billion.
Alliance revenues from Bristol-Myers for Eliquis and direct sales rose 25% to $1.64 billion driven by continued increased adoption in nonvalvular atrial fibrillation as well as oral anticoagulant market share gains in the emerging markets, developed Europe and United States. Xeljanz sales rose 18% to $538 million driven by growth in both the United States and international developed markets.
Xtandi recorded alliance revenues of $267 million in the quarter, up 28% year over year driven by strong demand in the metastatic and non-metastatic castration-resistant prostate cancer indications.
Inlyta revenues were $229 million in the quarter, up 34% driven mainly by growth in the United States and developed Europe, following FDA approvals in 2019 for the combination use of Inlyta for the first-line treatment of advanced renal cell carcinoma patients
New rare disease drug Vyndaqel/Vyndamax recorded sales of $453 million in the quarter, up 88% year over year.
Total biosimilar revenues were $530 million, up 79% year over year driven by new oncology biosimilars (Trazimera, Zirabev and Ruxience) as well as continued growth from Retacrit (a biosimilar of Epogen and Procrit) in the United States. Retacrit recorded $123 million of revenues in the quarter, up 21% year over year. Inflectra/Remsima recorded sales of $177 million globally, up 9% year over year.
Sterile injectables global revenues rose 4% operationally to $1.48 billion.
Ibrance revenues declined 1% year over year to $1.25 billion due to increase in enrollment in Pfizer’s Patient Assistance Program (provides Ibrance free of charge to certain low-income patients) due to COVID-19-related economic hardships. The company expects the negative impact to normalize over time as the economic impact of the pandemic reduces.
Global Prevnar 13/Prevenar 13 revenues declined 12% to $1.28. Prevnar 13 revenues declined 20% in the United States due to disruptions in patient visits amid the pandemic as well as the negative impact of the revised Advisory Committee on Immunization Practices (ACIP) recommendations in 2019 (shared decision making) for the adult indication. Prevenar 13 revenues declined 3% in international markets.
Enbrel revenues declined 11% to $319 million in key European markets, Japan, and Brazil due to continued biosimilar competition. Sutent sales declined 5% to $200 million. Chantix sales declined 21% to $217 million in the quarter due to loss of patent exclusivity in the United States and decline in patient visits due to the pandemic.
2021 Guidance
Pfizer raised its previously issued sales and earnings guidance for 2021, increasing revenue expectations from BNT162b2, which partly offset expectations of higher R&D costs for the development of COVID-19 vaccines and antiviral medicines as well as other mRNA-based programs.
Pfizer expects continued recovery from the pandemic throughout the year as a larger section of the population gets vaccinated against COVID-19. Importantly, Pfizer maintained its dividend for the second quarter of 2021 at 39 cents per share. It said it will not be reducing dividend even after Viatris begins paying its dividend.
Revenues are expected in the range of $70.5 billion to $72.5 billion versus $59.4 billion to $61.4 billion previously. The mid-point of the revenue guidance indicates growth of 71% from 2020 levels. The revenue guidance includes approximately $26 billion in sales from BNT162b2, much higher than $15 billion expected previously. The guidance includes Pfizer’s contracts, as of mid-April 2021, to deliver $1.6 billion doses of the vaccine globally this year. On the conference call, Pfizer said they expect continuing demand for BNT162b2 in 2022 and beyond.
Adjusted earnings per share guidance was raised to a range of $3.55-$3.65 from the prior expectation of $3.10-$3.20. The earnings guidance indicates 59% increase over 2020 actual results. Foreign exchange is expected to benefit 2021 revenues by 3% and EPS by 4%.
Research and development expense is expected in the range of $9.8-10.3 billion compared with the prior expectation of $9.2-$9.7 billion to account for potential incremental spending on COVID-19-related programs and other mRNA-based projects. SI&A spending is expected in the range of $11.0-$12.0 billion (maintained). Adjusted tax rate is expected to be approximately 15% in 2021.
Excluding the COVID-19 vaccine, Pfizer’s core drug business also delivered strong growth in the first quarter, which pushed the company to raise its revenue guidance for the core business by $200 million for the year. Excluding BNT162b2, total revenues in 2021 are expected to be in the range of $44.6 billion to $46.6 billion compared with $44.4 billion to $46.4 billion expected previously. The mid-point of the guidance indicates approximately 6% operational growth year over year, in line with the company’s goal of delivering at least 6% compound annual growth rate through 2025. Adjusted earnings are expected in the range of $2.50 to $2.60 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 13.43% due to these changes.
VGM Scores
Currently, Pfizer has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Pfizer has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Pfizer (PFE) Down 3% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Pfizer (PFE - Free Report) . Shares have lost about 3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Pfizer due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Pfizer Q1 Earnings Beat, COVID-19 Vaccine Boosts Sales
Pfizer’s first-quarter results were better-than-expected as it beat estimates for both earnings and sales.
Pfizer reported first-quarter 2021 adjusted earnings per share of 93 cents, which comprehensively beat the Zacks Consensus Estimate of 79 cents. Earnings rose 47% year over year.
Revenues came in at $14.6 billion, which beat the Zacks Consensus Estimate of $13.5 billion. Sales rose 45% from the year-ago quarter on a reported basis and 42% on an operational basis mainly driven by sales of COVID-19 vaccine, BNT162b2. The vaccine contributed $3.5 billion in global sales in the quarter. Excluding revenues from BNT162b2, sales grew 8% operationally, in line with the company’s goal of delivering at least 6% compound annual growth rate through 2025.
In addition, higher sales of brands like Eliquis, Vyndaqel/Vyndamax, Inlyta, Xtandi and Xeljanz and higher biosimilars revenues drove sales growth. Weaker sales of Prevnar 13, Ibrance and Chantix in the United States and Enbrel internationally partially offset the increase.
Additional selling days in the quarter also benefited sales, partially offset by non-recurrence of COVID-related customer stocking benefit in the year-ago quarter.
International revenues rose 46% to $6.98 billion. On an operational basis, international sales rose 40% in the quarter. U.S. revenues rose 44% to $7.6 billion.
While currency benefited sales by 3%, pricing had a negative impact of 5% on sales.
Adjusted selling, informational and administrative (SI&A) expenses rose 7% (operationally) in the quarter to $2.7 billion. Adjusted R&D expenses rose 19% to $2.0 billion due to costs related to development of COVID-19 vaccines and antiviral medicines.
Segment Discussion
Oncology revenues increased 16% (on an operational basis) to $2.86 billion. Vaccine revenues were $4.89 billion versus $1.6 billion in the year-ago quarter. Internal Medicine rose 10% to $2.59 billion. The Inflammation & Immunology franchise rose 7% to $1.07 billion. The portfolio of Rare Disease rose 25% to $824 million. Hospital sub-segment’s sales rose 10% to $2.34 billion.
Alliance revenues from Bristol-Myers for Eliquis and direct sales rose 25% to $1.64 billion driven by continued increased adoption in nonvalvular atrial fibrillation as well as oral anticoagulant market share gains in the emerging markets, developed Europe and United States. Xeljanz sales rose 18% to $538 million driven by growth in both the United States and international developed markets.
Xtandi recorded alliance revenues of $267 million in the quarter, up 28% year over year driven by strong demand in the metastatic and non-metastatic castration-resistant prostate cancer indications.
Inlyta revenues were $229 million in the quarter, up 34% driven mainly by growth in the United States and developed Europe, following FDA approvals in 2019 for the combination use of Inlyta for the first-line treatment of advanced renal cell carcinoma patients
New rare disease drug Vyndaqel/Vyndamax recorded sales of $453 million in the quarter, up 88% year over year.
Total biosimilar revenues were $530 million, up 79% year over year driven by new oncology biosimilars (Trazimera, Zirabev and Ruxience) as well as continued growth from Retacrit (a biosimilar of Epogen and Procrit) in the United States. Retacrit recorded $123 million of revenues in the quarter, up 21% year over year. Inflectra/Remsima recorded sales of $177 million globally, up 9% year over year.
Sterile injectables global revenues rose 4% operationally to $1.48 billion.
Ibrance revenues declined 1% year over year to $1.25 billion due to increase in enrollment in Pfizer’s Patient Assistance Program (provides Ibrance free of charge to certain low-income patients) due to COVID-19-related economic hardships. The company expects the negative impact to normalize over time as the economic impact of the pandemic reduces.
Global Prevnar 13/Prevenar 13 revenues declined 12% to $1.28. Prevnar 13 revenues declined 20% in the United States due to disruptions in patient visits amid the pandemic as well as the negative impact of the revised Advisory Committee on Immunization Practices (ACIP) recommendations in 2019 (shared decision making) for the adult indication. Prevenar 13 revenues declined 3% in international markets.
Enbrel revenues declined 11% to $319 million in key European markets, Japan, and Brazil due to continued biosimilar competition. Sutent sales declined 5% to $200 million. Chantix sales declined 21% to $217 million in the quarter due to loss of patent exclusivity in the United States and decline in patient visits due to the pandemic.
2021 Guidance
Pfizer raised its previously issued sales and earnings guidance for 2021, increasing revenue expectations from BNT162b2, which partly offset expectations of higher R&D costs for the development of COVID-19 vaccines and antiviral medicines as well as other mRNA-based programs.
Pfizer expects continued recovery from the pandemic throughout the year as a larger section of the population gets vaccinated against COVID-19. Importantly, Pfizer maintained its dividend for the second quarter of 2021 at 39 cents per share. It said it will not be reducing dividend even after Viatris begins paying its dividend.
Revenues are expected in the range of $70.5 billion to $72.5 billion versus $59.4 billion to $61.4 billion previously. The mid-point of the revenue guidance indicates growth of 71% from 2020 levels. The revenue guidance includes approximately $26 billion in sales from BNT162b2, much higher than $15 billion expected previously. The guidance includes Pfizer’s contracts, as of mid-April 2021, to deliver $1.6 billion doses of the vaccine globally this year. On the conference call, Pfizer said they expect continuing demand for BNT162b2 in 2022 and beyond.
Adjusted earnings per share guidance was raised to a range of $3.55-$3.65 from the prior expectation of $3.10-$3.20. The earnings guidance indicates 59% increase over 2020 actual results.
Foreign exchange is expected to benefit 2021 revenues by 3% and EPS by 4%.
Research and development expense is expected in the range of $9.8-10.3 billion compared with the prior expectation of $9.2-$9.7 billion to account for potential incremental spending on COVID-19-related programs and other mRNA-based projects. SI&A spending is expected in the range of $11.0-$12.0 billion (maintained). Adjusted tax rate is expected to be approximately 15% in 2021.
Excluding the COVID-19 vaccine, Pfizer’s core drug business also delivered strong growth in the first quarter, which pushed the company to raise its revenue guidance for the core business by $200 million for the year. Excluding BNT162b2, total revenues in 2021 are expected to be in the range of $44.6 billion to $46.6 billion compared with $44.4 billion to $46.4 billion expected previously. The mid-point of the guidance indicates approximately 6% operational growth year over year, in line with the company’s goal of delivering at least 6% compound annual growth rate through 2025. Adjusted earnings are expected in the range of $2.50 to $2.60 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 13.43% due to these changes.
VGM Scores
Currently, Pfizer has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Pfizer has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.