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Should Investors Buy Pfizer (PFE) & Moderna (MRNA) Stock for 2023?
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Much of the social and economic post-pandemic recovery is accredited to Covid-19 vaccine makers Pfizer (PFE - Free Report) and Moderna (MRNA - Free Report) . Investors may be wondering if these stocks will continue to be strong investments going into 2023.
Taking a look at the outlook and valuation of these two pharmaceutical stocks will give a better answer to this question.
Recent Performance
Before we dive into growth prospects and value let’s take a look at the recent performance of Pfizer and Moderna.
Pfizer is down -14% YTD to slightly outperform the S&P 500’s -16% and beat Moderna’s -31%. Over the last three years to cover the pandemic timeframe, MRNA is up +820% to crush PFE and the benchmark.
Image Source: Zacks Investment Research
Pfizer and Moderna stocks are gaining nice momentum as we close out the year. In fact, in the last three months, MRNA is up +34% Vs. PFE’s +11%. Both pharmaceutical stocks have outperformed broader indexes during this stretch.
Image Source: Zacks Investment Research
Valuation & Growth Outlook
Pfizer and Moderna stock both carry an “A” grade for Value in our Style Scores system. Trading around $50 per share and roughly 18% from its highs, PFE has a forward P/E of 7.8X. In comparison, MRNA trades 45% off its high at $176 a share and 8.49X forward earnings.
Both stocks look attractive relative to their past. Moderna had its IPO in 2018 with the stock trading nicely below its historic high of 18.9X. When comparing this period, Pfizer also trades solidly beneath its high of 15.7X.
Pivoting to growth, Pfizer’s earnings are now expected to climb 46% to $6.46 a share in 2022. Fiscal 2023 EPS is projected to drop -25% to $4.85 following a strong year for PFE’s bottom line attributed to its covid-boosted growth. Earnings estimate revisions have declined for both FY22 and FY23 over the last 90 days.
Image Source: Zacks Investment Research
Sales are projected to pop 23% this year and decline -23% in FY23 to $76.99 billion. Still, FY23 sales would represent 49% growth from pre-pandemic levels with 2019 sales at $51.75 billion.
Looking at Moderna, earnings are forecasted to decline -24% this year to $21.48 per share after an excellent FY21. Fiscal 2023 earnings are projected to drop another -78% to $4.58 a share as MRNA’s EPS continues to its post-pandemic reality.
Earnings estimates for FY22 and FY23 revisions have declined over the last quarter as well.
Image Source: Zacks Investment Research
On its top line, Moderna’s sales are now projected to rise 4% this year but drop -52% in FY23 to $9.19 billion. This is still a staggering 15,217% increase from 2019 pre-pandemic sales.
Bottom Line
Pfizer (PFE - Free Report) and Moderna (MRNA - Free Report) stock both land a Zacks Rank #3 (Hold). While earnings estimate revisions are down in FY22 for PFE and MRNA they still trade attractively relative to their past. The growth in both companies continues to be impressive from pre-pandemic levels and investors may be rewarded for holding these stocks at current levels.
It is always interesting to compare these vaccine makers’ financial metrics and performance but investors should be mindful that they are unique companies in different stages of corporate life. Pfizer is a health giant with a diverse drug pipeline that should recover in a post-covid-vaccine world while Moderna still has to prove itself and its mRNA-based therapies.
To that note, PFE offers investors a respectable 3.14% annual dividend yield while MRNA doesn’t have a dividend at the moment but the price performance of the stock has edged Pfizer.
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Should Investors Buy Pfizer (PFE) & Moderna (MRNA) Stock for 2023?
Much of the social and economic post-pandemic recovery is accredited to Covid-19 vaccine makers Pfizer (PFE - Free Report) and Moderna (MRNA - Free Report) . Investors may be wondering if these stocks will continue to be strong investments going into 2023.
Taking a look at the outlook and valuation of these two pharmaceutical stocks will give a better answer to this question.
Recent Performance
Before we dive into growth prospects and value let’s take a look at the recent performance of Pfizer and Moderna.
Pfizer is down -14% YTD to slightly outperform the S&P 500’s -16% and beat Moderna’s -31%. Over the last three years to cover the pandemic timeframe, MRNA is up +820% to crush PFE and the benchmark.
Image Source: Zacks Investment Research
Pfizer and Moderna stocks are gaining nice momentum as we close out the year. In fact, in the last three months, MRNA is up +34% Vs. PFE’s +11%. Both pharmaceutical stocks have outperformed broader indexes during this stretch.
Image Source: Zacks Investment Research
Valuation & Growth Outlook
Pfizer and Moderna stock both carry an “A” grade for Value in our Style Scores system. Trading around $50 per share and roughly 18% from its highs, PFE has a forward P/E of 7.8X. In comparison, MRNA trades 45% off its high at $176 a share and 8.49X forward earnings.
Both stocks look attractive relative to their past. Moderna had its IPO in 2018 with the stock trading nicely below its historic high of 18.9X. When comparing this period, Pfizer also trades solidly beneath its high of 15.7X.
Pivoting to growth, Pfizer’s earnings are now expected to climb 46% to $6.46 a share in 2022. Fiscal 2023 EPS is projected to drop -25% to $4.85 following a strong year for PFE’s bottom line attributed to its covid-boosted growth. Earnings estimate revisions have declined for both FY22 and FY23 over the last 90 days.
Image Source: Zacks Investment Research
Sales are projected to pop 23% this year and decline -23% in FY23 to $76.99 billion. Still, FY23 sales would represent 49% growth from pre-pandemic levels with 2019 sales at $51.75 billion.
Looking at Moderna, earnings are forecasted to decline -24% this year to $21.48 per share after an excellent FY21. Fiscal 2023 earnings are projected to drop another -78% to $4.58 a share as MRNA’s EPS continues to its post-pandemic reality.
Earnings estimates for FY22 and FY23 revisions have declined over the last quarter as well.
Image Source: Zacks Investment Research
On its top line, Moderna’s sales are now projected to rise 4% this year but drop -52% in FY23 to $9.19 billion. This is still a staggering 15,217% increase from 2019 pre-pandemic sales.
Bottom Line
Pfizer (PFE - Free Report) and Moderna (MRNA - Free Report) stock both land a Zacks Rank #3 (Hold). While earnings estimate revisions are down in FY22 for PFE and MRNA they still trade attractively relative to their past. The growth in both companies continues to be impressive from pre-pandemic levels and investors may be rewarded for holding these stocks at current levels.
It is always interesting to compare these vaccine makers’ financial metrics and performance but investors should be mindful that they are unique companies in different stages of corporate life. Pfizer is a health giant with a diverse drug pipeline that should recover in a post-covid-vaccine world while Moderna still has to prove itself and its mRNA-based therapies.
To that note, PFE offers investors a respectable 3.14% annual dividend yield while MRNA doesn’t have a dividend at the moment but the price performance of the stock has edged Pfizer.