We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Pfizer (PFE) Stock Falls in a Year: Time to Buy, Sell or Hold?
Read MoreHide Full Article
Pfizer (PFE - Free Report) stock has been reeling under the pressure of a declining top line due to a steep drop in revenues from its COVID-19 products, the BioNTech (BNTX - Free Report) -partnered Comirnaty vaccine and Paxlovid oral pill, on lower demand.
In the past year, Pfizer’s stock has declined 24.1% against an increase of 30.8% for the industry. The stock has also underperformed the sector as well as the S&P 500.
Pfizer’s stock is trading at an 11-year low. Sales of Comirnaty and Paxlovid declined steeply in 2023 due to lower demand following the end of the pandemic. In 2024, Pfizer expects revenues from Paxlovid and Comirnaty to decline further. Excluding revenues from Seagen, the total revenue guidance for legacy Pfizer is $54.5 to $57.5 billion, which indicates a decline from the 2023 level.
However, Pfizer expects operational revenues from non-COVID products to rise in 2024 and thereafter. This was evident from Pfizer’s first-quarter results as revenues from non-COVID products rose 11% operationally in the first quarter.
New Drugs & Seagen Acquisition May Make a Difference
The last year was a record year for Pfizer in terms of FDA approvals. It received nine new medicine/vaccine approvals. Pfizer has been relying on its newly launched and newly acquired products to improve its sales performance amid a decline in revenues from its COVID-19 products.
Pfizer expects better non-COVID operational revenue growth in the future quarters, driven by its key drugs like Prevnar, Vyndaqel and Bristol-Myers (BMY - Free Report) -partnered Eliquis, new launches like Abrysvo, Velsipity, Penbraya, newly acquired products like Nurtec, as well as those acquired from the acquisition of Seagen in December last year.
Pfizer is also working on expanding the labels of approved products like Padcev, Adcetris, Litfulo, Velsipity and Elrexfio, among others.
Pfizer’s new products, newly acquired products, including those acquired from Seagen, and a robust cancer pipeline position it strongly for operational growth in 2025 and beyond. Pfizer expects 2025 to 2030 revenue CAGR to be approximately 6%.
Pfizer expects the 2023 acquisition of Seagen to contribute more than $10 billion in 2030 risk-adjusted revenues with potential significant growth beyond 2030. It also plans to save $4 billion in costs by the end of 2024.
Cash Reserves Reflect COVID Profits
During the pandemic, Pfizer gave the world the first and most widely used vaccine, Comirnaty and the oral antiviral pill, Paxlovid. The phenomenal profits that Pfizer generated from its COVID products in 2021 and 2022 strengthened its cash position, which is being used to make acquisitions, increase dividends, buy back shares and reduce debt. The cash enabled it to acquire Arena, ReViral, Biohaven and Global Blood Therapeutics in 2022 and Seagen in 2023. It also allowed Pfizer to increase investments in R&D and SG&A to support its expected new product launches. Overall, the profits and cash from COVID-19 products allowed Pfizer to invest in its growth plans for the second half of this decade. These investments are starting to show results now.
Attractive Valuation & Rising Estimates
The pessimism toward Pfizer has pushed the stock to a significantly low price. So, from a valuation standpoint, Pfizer appears attractive relative to the industry and is trading below its mean. Going by the price/earnings ratio, the company shares currently trade at 10.85 forward earnings, lower than 20.29 for the industry and the stock’s mean of 11.57.
PFE Stock Valuation
Image Source: Zacks Investment Research
PFE Estimate Movement
The Zacks Consensus Estimate for earnings has risen from $2.36 to $2.38 per share for 2024 over the past 60 days.
Image Source: Zacks Investment Research
Conclusion
Though in 2021/2022, no company was as strongly placed in the COVID vaccines/treatment market as Pfizer, once the pandemic ended, its woes began. Its stock price hit new lows in 2023 and 2024. Investors’ concerns rose about its long-term growth drivers beyond its COVID-related products due to competitive pressure. Some even questioned Pfizer’s fundamentals and growth prospects. Its sales fell 42% in 2023 from a record high of $100 billion in 2022. It has faced some recent pipeline setbacks related to danuglipron, an oral GLP-1R agonist for obesity and fordadistrogene movaparvovec, a gene therapy for Duchenne muscular dystrophy.
At first glance, the stock looks like a sure-shot sell. However, Pfizer’s worst slowdown might be over now, and its non-COVID drugs and potential contribution from new and newly acquired products are likely to drive growth. The company has continued to pay regular dividends. Its dividend yield stands at around 6%, which is quite impressive.
A new investor should avoid buying Pfizer stock right now. However, those who already own the stock may stay invested for a year or so rather than selling it and observe how its new products perform. Some investors might consider buying this pharmaceutical giant’s stock at the rock-bottom valuation for long-term gains.
Image: Bigstock
Pfizer (PFE) Stock Falls in a Year: Time to Buy, Sell or Hold?
Pfizer (PFE - Free Report) stock has been reeling under the pressure of a declining top line due to a steep drop in revenues from its COVID-19 products, the BioNTech (BNTX - Free Report) -partnered Comirnaty vaccine and Paxlovid oral pill, on lower demand.
In the past year, Pfizer’s stock has declined 24.1% against an increase of 30.8% for the industry. The stock has also underperformed the sector as well as the S&P 500.
PFE Stock Underperforms Industry, Sector & S&P 500
Pfizer’s stock is trading at an 11-year low. Sales of Comirnaty and Paxlovid declined steeply in 2023 due to lower demand following the end of the pandemic. In 2024, Pfizer expects revenues from Paxlovid and Comirnaty to decline further. Excluding revenues from Seagen, the total revenue guidance for legacy Pfizer is $54.5 to $57.5 billion, which indicates a decline from the 2023 level.
However, Pfizer expects operational revenues from non-COVID products to rise in 2024 and thereafter. This was evident from Pfizer’s first-quarter results as revenues from non-COVID products rose 11% operationally in the first quarter.
New Drugs & Seagen Acquisition May Make a Difference
The last year was a record year for Pfizer in terms of FDA approvals. It received nine new medicine/vaccine approvals. Pfizer has been relying on its newly launched and newly acquired products to improve its sales performance amid a decline in revenues from its COVID-19 products.
Pfizer expects better non-COVID operational revenue growth in the future quarters, driven by its key drugs like Prevnar, Vyndaqel and Bristol-Myers (BMY - Free Report) -partnered Eliquis, new launches like Abrysvo, Velsipity, Penbraya, newly acquired products like Nurtec, as well as those acquired from the acquisition of Seagen in December last year.
Pfizer is also working on expanding the labels of approved products like Padcev, Adcetris, Litfulo, Velsipity and Elrexfio, among others.
Pfizer’s new products, newly acquired products, including those acquired from Seagen, and a robust cancer pipeline position it strongly for operational growth in 2025 and beyond. Pfizer expects 2025 to 2030 revenue CAGR to be approximately 6%.
Pfizer expects the 2023 acquisition of Seagen to contribute more than $10 billion in 2030 risk-adjusted revenues with potential significant growth beyond 2030. It also plans to save $4 billion in costs by the end of 2024.
Cash Reserves Reflect COVID Profits
During the pandemic, Pfizer gave the world the first and most widely used vaccine, Comirnaty and the oral antiviral pill, Paxlovid. The phenomenal profits that Pfizer generated from its COVID products in 2021 and 2022 strengthened its cash position, which is being used to make acquisitions, increase dividends, buy back shares and reduce debt. The cash enabled it to acquire Arena, ReViral, Biohaven and Global Blood Therapeutics in 2022 and Seagen in 2023. It also allowed Pfizer to increase investments in R&D and SG&A to support its expected new product launches. Overall, the profits and cash from COVID-19 products allowed Pfizer to invest in its growth plans for the second half of this decade. These investments are starting to show results now.
Attractive Valuation & Rising Estimates
The pessimism toward Pfizer has pushed the stock to a significantly low price. So, from a valuation standpoint, Pfizer appears attractive relative to the industry and is trading below its mean. Going by the price/earnings ratio, the company shares currently trade at 10.85 forward earnings, lower than 20.29 for the industry and the stock’s mean of 11.57.
PFE Stock Valuation
PFE Estimate Movement
The Zacks Consensus Estimate for earnings has risen from $2.36 to $2.38 per share for 2024 over the past 60 days.
Conclusion
Though in 2021/2022, no company was as strongly placed in the COVID vaccines/treatment market as Pfizer, once the pandemic ended, its woes began. Its stock price hit new lows in 2023 and 2024. Investors’ concerns rose about its long-term growth drivers beyond its COVID-related products due to competitive pressure. Some even questioned Pfizer’s fundamentals and growth prospects. Its sales fell 42% in 2023 from a record high of $100 billion in 2022. It has faced some recent pipeline setbacks related to danuglipron, an oral GLP-1R agonist for obesity and fordadistrogene movaparvovec, a gene therapy for Duchenne muscular dystrophy.
At first glance, the stock looks like a sure-shot sell. However, Pfizer’s worst slowdown might be over now, and its non-COVID drugs and potential contribution from new and newly acquired products are likely to drive growth. The company has continued to pay regular dividends. Its dividend yield stands at around 6%, which is quite impressive.
A new investor should avoid buying Pfizer stock right now. However, those who already own the stock may stay invested for a year or so rather than selling it and observe how its new products perform. Some investors might consider buying this pharmaceutical giant’s stock at the rock-bottom valuation for long-term gains.
Pfizer currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.