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Pfizer (PFE) Q2 Earnings Coming Up: What Should Investors Do?
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Pfizer (PFE - Free Report) will report its second-quarter 2024 earnings on Jul 30, before market open. The Zacks Consensus Estimate for sales and earnings is pegged at $13.22 billion and 45 cents per share, respectively. Earnings estimates for Pfizer have risen from $2.38 to $2.39 per share over the past seven days. For 2025, earnings estimates have been stable at $2.75 per share over the same timeframe.
Image Source: Zacks Investment Research
Earnings Surprise History
The healthcare bellwether’s performance has been solid, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 66.40%, on average. In the last reported quarter, the company delivered an earnings surprise of 46.43%, as seen in the chart below.
Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1, #2 (Buy) or #3 have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Factors Shaping the Upcoming Results
Pfizer’s revenues are expected to have declined in the second quarter of 2024 due to a steep drop in revenues from its COVID-19 products on lower demand.
Pfizer records direct sales and alliance revenues from its partner, BioNTech (BNTX - Free Report) , for the COVID-19 vaccine, Comirnaty, and product revenues from its oral antiviral pill for COVID, Paxlovid.
While sales of COVID products are expected to have declined, some key non-COVID products like Prevnar, Vyndaqel and Bristol-Myers (BMY - Free Report) -partnered Eliquis, new launches like Abrysvo and newly acquired products from Seagen are expected to have provided top-line support in the second quarter. In the first quarter, revenues from Pfizer’s non-COVID products rose 11% operationally. The positive trend is expected to have continued in the second quarter.
Vyndaqel/Vyndamax sales have been benefiting from strong demand trends, driven by the continued strong uptake of transthyretin amyloid cardiomyopathy indication, primarily in the United States and developed Europe.
Sales of the Prevnar family of vaccines rose in the first quarter due to the favorable timing of government orders for pediatric patients in the United States, higher demand in the private market and strong uptake of the adult indication in some ex-U.S. markets. It remains to be seen if sales continued to be strong in the second quarter.
The Zacks Consensus Estimate for sales of the Prevnar family of vaccines is $1.52 billion, while our model estimates the same to be $1.56 billion.
The Zacks Consensus Estimate for sales of Vyndaqel/Vyndamax is $1.08 billion, while our model estimates the same to be $1.03 billion.
In addition, alliance revenues and direct sales from Eliquis are likely to have provided top-line support.
The Zacks Consensus Estimate for alliance revenues from Eliquis is $1.86 billion, while our model estimate is $1.82 billion.
The acquisition of Seagen closed in mid-December 2023. The acquisition added antibody-drug conjugates or ADCs — Adcetris, Padcev, Tukysa and Tivdak — to Pfizer’s cancer portfolio. These drugs are likely to have boosted Pfizer’s oncology sales in the second quarter.
In the Oncology unit, sales of the key medicine, Ibrance, are likely to have been hurt due to lower demand trends globally due to competitive pressure. The Zacks Consensus Estimate for Ibrance is $1.12 billion, while our model estimate is $1.11 billion.
Investors will be keen to know the sales numbers of Pfizer’s several newly launched drugs like RSV vaccine Abrysvo, Velsipity pill for ulcerative colitis, pentavalent meningococcal vaccine Penbraya and Zavzpret nasal spray for migraine. In April, the FDA approved Pfizer’s gene therapy, Beqvez (fidanacogene elaparvovec), for the treatment of adults with hemophilia B, a rare genetic bleeding disorder.
Sales of newly acquired products, Nurtec ODT/Vydura and Oxbryta, declined sequentially in the first quarter. It remains to be seen if sales of these newly acquired products improved in the second quarter.
Nonetheless, a single quarter’s results are not so important for long-term investors. Let us delve deeper to understand whether to buy, sell or hold Pfizer stock.
Price Performance & Valuation
Year to date, Pfizer’s stock is up 2.3% compared with an increase of 20.0% for the industry. The stock has also underperformed the sector as well as the S&P 500.
From a valuation standpoint, Pfizer appears attractive relative to the industry and is trading below its 5-year mean. Going by the price/earnings ratio, the shares currently trade at 11.38 forward earnings, lower than 20.06 for the industry and the stock’s 5-year mean of 11.53. The stock is also much cheaper than several other large drugmakers like Eli Lilly, Novo Nordisk, AstraZeneca, Merck and others.
PFE Stock Valuation
Image Source: Zacks Investment Research
Investment Thesis
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. Pfizer stock was hurt by a declining top line due to a steep drop in revenues from its COVID-19 products.
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.
However, Pfizer’s worst slowdown might be over now. The last year was a record year for the company in terms of FDA approvals. It received nine new medicine/vaccine approvals. Pfizer expects better non-COVID operational revenue growth in the future quarters, driven by its key drugs like Prevnar, Vyndaqel and Eliquis, new launches like Abrysvo, Velsipity, Penbraya, and newly acquired products, including those acquired from Seagen.
Earlier this month, Pfizer said that it would move forward with the development of a once-daily formulation of danuglipron, its GLP-1 candidate for obesity, based on encouraging results from an ongoing study. This announcement marked Pfizer’s comeback in the lucrative obesity market after facing some setbacks.
Also, 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. The company continues to pay regular dividends. Its dividend yield stands at around 6%, which is quite impressive.
Conclusion
No matter how the second-quarter results play out, we suggest that those who already own the stock may stay invested for a year or so and observe how Pfizer’s new products perform. Some investors might consider buying this pharmaceutical giant’s stock at the rock-bottom valuation for long-term gains. A new short-term investor should avoid buying Pfizer stock right now.
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Pfizer (PFE) Q2 Earnings Coming Up: What Should Investors Do?
Pfizer (PFE - Free Report) will report its second-quarter 2024 earnings on Jul 30, before market open. The Zacks Consensus Estimate for sales and earnings is pegged at $13.22 billion and 45 cents per share, respectively. Earnings estimates for Pfizer have risen from $2.38 to $2.39 per share over the past seven days. For 2025, earnings estimates have been stable at $2.75 per share over the same timeframe.
Earnings Surprise History
The healthcare bellwether’s performance has been solid, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 66.40%, on average. In the last reported quarter, the company delivered an earnings surprise of 46.43%, as seen in the chart below.
What Does Our Model Say?
Pfizer has an Earnings ESP of -2.44% and a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1, #2 (Buy) or #3 have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Factors Shaping the Upcoming Results
Pfizer’s revenues are expected to have declined in the second quarter of 2024 due to a steep drop in revenues from its COVID-19 products on lower demand.
Pfizer records direct sales and alliance revenues from its partner, BioNTech (BNTX - Free Report) , for the COVID-19 vaccine, Comirnaty, and product revenues from its oral antiviral pill for COVID, Paxlovid.
While sales of COVID products are expected to have declined, some key non-COVID products like Prevnar, Vyndaqel and Bristol-Myers (BMY - Free Report) -partnered Eliquis, new launches like Abrysvo and newly acquired products from Seagen are expected to have provided top-line support in the second quarter. In the first quarter, revenues from Pfizer’s non-COVID products rose 11% operationally. The positive trend is expected to have continued in the second quarter.
Vyndaqel/Vyndamax sales have been benefiting from strong demand trends, driven by the continued strong uptake of transthyretin amyloid cardiomyopathy indication, primarily in the United States and developed Europe.
Sales of the Prevnar family of vaccines rose in the first quarter due to the favorable timing of government orders for pediatric patients in the United States, higher demand in the private market and strong uptake of the adult indication in some ex-U.S. markets. It remains to be seen if sales continued to be strong in the second quarter.
The Zacks Consensus Estimate for sales of the Prevnar family of vaccines is $1.52 billion, while our model estimates the same to be $1.56 billion.
The Zacks Consensus Estimate for sales of Vyndaqel/Vyndamax is $1.08 billion, while our model estimates the same to be $1.03 billion.
In addition, alliance revenues and direct sales from Eliquis are likely to have provided top-line support.
The Zacks Consensus Estimate for alliance revenues from Eliquis is $1.86 billion, while our model estimate is $1.82 billion.
The acquisition of Seagen closed in mid-December 2023. The acquisition added antibody-drug conjugates or ADCs — Adcetris, Padcev, Tukysa and Tivdak — to Pfizer’s cancer portfolio. These drugs are likely to have boosted Pfizer’s oncology sales in the second quarter.
In the Oncology unit, sales of the key medicine, Ibrance, are likely to have been hurt due to lower demand trends globally due to competitive pressure. The Zacks Consensus Estimate for Ibrance is $1.12 billion, while our model estimate is $1.11 billion.
Investors will be keen to know the sales numbers of Pfizer’s several newly launched drugs like RSV vaccine Abrysvo, Velsipity pill for ulcerative colitis, pentavalent meningococcal vaccine Penbraya and Zavzpret nasal spray for migraine. In April, the FDA approved Pfizer’s gene therapy, Beqvez (fidanacogene elaparvovec), for the treatment of adults with hemophilia B, a rare genetic bleeding disorder.
Sales of newly acquired products, Nurtec ODT/Vydura and Oxbryta, declined sequentially in the first quarter. It remains to be seen if sales of these newly acquired products improved in the second quarter.
Nonetheless, a single quarter’s results are not so important for long-term investors. Let us delve deeper to understand whether to buy, sell or hold Pfizer stock.
Price Performance & Valuation
Year to date, Pfizer’s stock is up 2.3% compared with an increase of 20.0% for the industry. The stock has also underperformed the sector as well as the S&P 500.
Pfizer Stock Underperforms Industry, Sector & S&P 500
From a valuation standpoint, Pfizer appears attractive relative to the industry and is trading below its 5-year mean. Going by the price/earnings ratio, the shares currently trade at 11.38 forward earnings, lower than 20.06 for the industry and the stock’s 5-year mean of 11.53. The stock is also much cheaper than several other large drugmakers like Eli Lilly, Novo Nordisk, AstraZeneca, Merck and others.
PFE Stock Valuation
Investment Thesis
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. Pfizer stock was hurt by a declining top line due to a steep drop in revenues from its COVID-19 products.
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.
However, Pfizer’s worst slowdown might be over now. The last year was a record year for the company in terms of FDA approvals. It received nine new medicine/vaccine approvals. Pfizer expects better non-COVID operational revenue growth in the future quarters, driven by its key drugs like Prevnar, Vyndaqel and Eliquis, new launches like Abrysvo, Velsipity, Penbraya, and newly acquired products, including those acquired from Seagen.
Earlier this month, Pfizer said that it would move forward with the development of a once-daily formulation of danuglipron, its GLP-1 candidate for obesity, based on encouraging results from an ongoing study. This announcement marked Pfizer’s comeback in the lucrative obesity market after facing some setbacks.
Also, 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. The company continues to pay regular dividends. Its dividend yield stands at around 6%, which is quite impressive.
Conclusion
No matter how the second-quarter results play out, we suggest that those who already own the stock may stay invested for a year or so and observe how Pfizer’s new products perform. Some investors might consider buying this pharmaceutical giant’s stock at the rock-bottom valuation for long-term gains. A new short-term investor should avoid buying Pfizer stock right now.