A month has gone by since the last earnings report for Pfizer (PFE Quick QuotePFE - Free Report) . Shares have lost about 5.9% 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.

Q2 Earnings & Sales Beat

Pfizer’s second-quarter results were strong as it beat estimates for earnings as well as sales. 

Pfizer reported second-quarter 2024 adjusted earnings per share of 60 cents, which comfortably beat the Zacks Consensus Estimate of 45 cents per share. Earnings declined 11% year over year.

Revenues came in at $13.28 billion, up 2% from the year-ago quarter on a reported basis, reflecting an operational increase of 3% and a negative currency impact of 1%. Total revenues beat the Zacks Consensus Estimate of $13.13 billion. This was Pfizer’s first quarter of top-line growth after reporting declines for the past five quarters.

Higher sales of Pfizer’s key non-COVID products like Vyndaqel and Eliquis, new product launches and newly acquired products from Seagen offset an expected drop in revenues from its COVID-19 vaccine Comirnaty. Sales of key drugs Xeljanz and Ibrance declined in the quarter.

Seagen drugs contributed $845 million to the top line in the second quarter. Revenues from Pfizer’s non-COVID products rose 14% operationally in the second quarter.

International revenues declined 15% on an operational basis to $5.39 billion. U.S. revenues rose 22% to $7.89 billion.

Adjusted selling, informational and administrative (SI&A) expenses rose 8% (operationally) in the quarter to $3.67 billion, primarily due to increased spending behind recently acquired and launched products. Adjusted R&D expenses rose 2% to $2.67 billion, driven by higher spending on certain acquired assets from Seagen which was partially offset by lower spending primarily due to the cost realignment program.

Along with the second-quarter results, Pfizer announced the launch of a manufacturing optimization program. Phase I of the program will fucus on operational efficiencies and is expected to save $1.5 billion in costs by 2027 end some of which is anticipated to be realized beginning in 2025.

Segment Discussion

Pfizer reports its revenues under three broad sub-segments of its Biopharma operating segment — Primary Care, Specialty Care and Oncology. Sales of the Primary Care segment declined 15% operationally to $4.95 billion. The Specialty Care unit recorded sales of $4.08 billion, up 14%. Sales of Oncology rose 27% to $3.96 billion.

Primary Care

In Primary Care, alliance revenues and direct sales from Bristol-Myers for Eliquis rose 8% to $1.88 billion driven by continued share gains in the oral anti-coagulant market. However, sales were hurt by generic competition in some international markets due to loss of patent exclusivity. Alliance revenues from Eliquis beat the Zacks Consensus Estimate of $1.86 billion as well as our model estimate of $1.82 billion.

Global Prevnar family revenues declined 4% to $1.36 billion due to fewer adult vaccinations in the United States and lower pediatric indication sales in certain emerging markets and Japan. The pediatric indication in United States witnessed growth due to the launch of Prevnar 20 in 2023. The Prevnar family includes revenues from Prevnar 13/Prevenar 13 (pediatric and adult) and Prevnar 20 (adult and pediatric). Prevnar revenues missed the Zacks Consensus Estimate of $1.52 billion as well as our model estimate of $1.56 billion. Prevnar sales declined 4% in the United States and 3% in international markets.

Direct sales and alliance revenues from BioNTech for Comirnaty were $195 million in the quarter, down 87% year over year due to lower demand and contractual deliveries in international markets and due to the transition to traditional commercial markets in the United States. Comirnaty sales beat the Zacks Consensus Estimate of $153.0 million and our estimate of $124.9 million.

Paxlovid revenues rose 79% to $251 million as no U.S. sales were recorded in the second quarter of 2023 compared to $68 million in the second quarter of 2024. Also, higher demand due to the rise in infections in some international markets led to sales growth.

Newly acquired product Nurtec ODT/Vydura contributed $356 million in the second quarter, up 44% year over year driven by strong demand in the United States and launches in international markets.

Among the new products, Pfizer’s RSV vaccine, Abrysvo, recorded sales of $56 million in the second quarter compared with $145 million in the previous quarter. The performance of Abrysvo was in line with seasonal vaccine trends.

Specialty Care

Global Vyndaqel family revenues of $1.32 billion rose 71% year over year, driven by continued demand growth, primarily in the United States and developed Europe. The Vyndaqel family includes global revenues from Vyndaqel as well as revenues for Vyndamax in the United States and Vynmac in Japan. Vyndaqel family sales beat the Zacks Consensus Estimate of $1.08 billion as well as our model estimate of $1.03 billion.

Xeljanz sales declined 34% to $303 million. Enbrel revenues declined 15% to $179 million.

New product, Oxbryta, generated sales of $92 million in the second quarter of 2024, up 20% year over year. 

Another new drug, Cibinqo recorded revenues of $47 million in the second quarter, up 28% year over year.

Oncology

Pfizer’s top-line numbers in the second quarter of 2024 included revenues from the acquisition of Seagen. The acquisition added Seagen’s antibody-drug conjugates or ADCs — Adcetris, Padcev, Tukysa and Tivdak — to Pfizer’s cancer portfolio. Adcetris, Padcev, Tukysa and Tivdak contributed $279 million, $394 million, $121 million and $33 million, respectively, to Pfizer’s oncology revenues in the second quarter. Pfizer is particularly witnessing strong demand for Padcev.

In Oncology, Ibrance revenues declined 8% year over year to $1.13 billion. Lower demand trends globally due to competitive pressure and price decreases in some developed international markets hurt sales growth. Ibrance revenues slightly beat the Zacks Consensus Estimate of $1.12 billion and our estimate of $1.11 billion.

Xtandi recorded alliance revenues of $495 million in the quarter, up 17% year over year. Inlyta revenues were $252 million in the quarter, down 2%. 

Lorbrena revenues were $169 million in the quarter, up 45%.

Revenues from oncology biosimilars were $279 million, down 22% year over year due to lower pricing in the United States.

2024 Guidance

Pfizer raised its revenue and earnings guidance for 2024.

Adjusted earnings are expected in the range of $2.45 to $2.65 versus the prior expectation of $2.15 to $2.35 per share. This range includes the expected impact of 40 cents dilution from the Seagen acquisition mainly due to the costs of financing the transaction.

Pfizer expects total revenues to be in the range of $59.5 billion to $62.5 billion versus the prior expectation of $58.5 billion to $61.5 billion.
 
The 2024 revenue guidance includes $8.5 billion in potential combined revenues for Paxlovid and Comirnaty higher than prior expectation of $8 billion due to higher potential revenues from Paxlovid. The $8.5 billion combined guidance comprises $5 billion in sales from Comirnaty and $3.5 billion (previously $3.0 billion) from Paxlovid. 

Excluding revenues from Comirnaty and Paxlovid but including revenues from Seagen, Pfizer expects total revenues to increase 9% to 11% on an operational basis, up from the prior expectation of 8% to 10%.

Pfizer expects its revenues to be heavily weighted to the fourth quarter due to the seasonal cadence of its products.
Pfizer expects cost cuts and internal restructuring, including layoffs, to deliver savings of $4 billion in 2024. Adjusted gross margin is expected to be in the 70% range in 2024. 

Research and development expense is expected to be in the range of $11.0 to $12.0 billion in 2024 (maintained). SI&A spending is expected in the range of $13.8 billion to $14.8 billion (maintained). The adjusted tax rate is expected to be approximately 13% in 2024 versus the prior expectation of approximately 15%.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

The consensus estimate has shifted 10.02% due to these changes.

VGM Scores

At this time, Pfizer has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. 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.

Performance of an Industry Player

Pfizer belongs to the Zacks Large Cap Pharmaceuticals industry. Another stock from the same industry, AbbVie (ABBV Quick QuoteABBV - Free Report) , has gained 5.4% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.

AbbVie reported revenues of $14.46 billion in the last reported quarter, representing a year-over-year change of +4.3%. EPS of $2.65 for the same period compares with $2.91 a year ago.

AbbVie is expected to post earnings of $2.95 per share for the current quarter, representing no change from the year-ago quarter. Over the last 30 days, the Zacks Consensus Estimate has changed +0.2%.

AbbVie has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.