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Pfizer (PFE) Stock Sinks on Weak 2024 View as COVID Sales Fall
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Pfizer (PFE - Free Report) issued weak revenue and profit guidance for 2024 due to lower-than-expected demand for its COVID products — COVID-19 vaccine, Comirnaty, and its oral antiviral pill for COVID, Paxlovid. Pfizer’s guidance for 2024 includes its expectations from the acquisition of Seagen , which is expected to close today, as all regulatory approvals have been received.
Pfizer records direct sales and alliance revenues from its partner BioNTech (BNTX - Free Report) for Comirnaty and product revenues from Paxlovid.
Pfizer expects total revenues to be in the range of $58.5 to $61.5 billion in 2024, which indicates almost flat growth from 2023’s expected range of $58.0 to $61.0 billion. The range is well short of the Zacks Consensus Estimate of $62.92 billion.
The 2024 revenue guidance includes $8 billion in potential combined revenues for Paxlovid and Comirnaty, well short of our model estimate of approximately $11.7 billion. The number is also significantly lower than the expected combined revenues of $12.5 billion for 2023. The $8 billion combined guidance comprises $5 billion from Comirnaty and $3 billion from Paxlovid.
Sales of Pfizer’s COVID products witnessed a steep decline after the pandemic ended. Pfizer is launching both Comirnaty and Paxlovid in traditional commercial markets in the United States in the hope of reviving sales. However, it does not look like this strategy can lead to much improvement in sales.
The total revenue guidance also includes $3.1 billion in expected revenues from Seagen. Pfizer had offered to buy cancer drugmaker Seagen for approximately $43 billion in March. Seagen’s acquisition is expected to strengthen Pfizer’s portfolio of cancer drugs by addinga class of antibody-drug conjugates. Seagen currently markets four cancer drugs — Adcetris, Padcev, Tukysa and Tivdak. Pfizer expects the acquisition to double the size of its early-stage oncology pipeline over the long term.
The total revenue guidance also includes approximately $1 billion due to the reclassification of Pfizer’s royalty income from Other (Income)/Deductions into the Revenue line.
Excluding revenues from Seagen and the abovementioned reclassification, the revenue guidance for legacy Pfizer is $54.5 to $57.5 billion, which indicates a decline from the expected range for 2023.
Adjusted earnings are expected in the range of $2.05 to $2.25 per share including the expected impact of financing costs related to the Seagen acquisition. The earnings range was also well short of the Zacks Consensus Estimate of $3.10 per share.
However, excluding 40 cents dilution from the Seagen acquisition, adjusted earnings for legacy Pfizer are expected in the range of $2.45 to $2.65 per share.
Pfizer’s shares were down almost 6.7% on Wednesday in response to the muted guidance for 2024. Pfizer’s stock has declined 48.1% so far this year against an increase of 4.5% for the industry.
Image Source: Zacks Investment Research
Excluding COVID-19 products but including Seagen, Pfizer expects its revenues to rise 8% to 10% on an operational basis in 20243 as sales from non-COVID drugs remain strong. Excluding the contribution from COVID-19 products as well as Seagen, operational sales are expected to increase 3%-5%.
With the decline in demand for COVID products, Pfizer announced cost cuts, including layoffs, in August 2023, which it said would deliver targeted savings of at least $3.5 billion. However, the company raised its expectations of savings by $500 million to $4 billion.
Research and development expense is expected in the range of $11.0 to $12.0 billion in 2024. SI&A spending is expected in the range of $13.8 to $14.8 billion. The adjusted tax rate is expected to be approximately 15% in 2024.
Pfizer maintained its previously issued sales and earnings guidance range for 2023 of $58.0-$61.0 billion and $1.45-$1.65 per share, respectively.
Another COVID-19 vaccine maker, Moderna (MRNA - Free Report) , is also seeing declining sales and profits due to weak demand for its only marketed product, an mRNA-based COVID-19 vaccine. Moderna and Pfizer were the first two companies to give the world vaccines for COVID-19. The profits that Moderna generated from its COVID products boosted its cash resources, which is now helping it accelerate its pipeline development.
Image: Bigstock
Pfizer (PFE) Stock Sinks on Weak 2024 View as COVID Sales Fall
Pfizer (PFE - Free Report) issued weak revenue and profit guidance for 2024 due to lower-than-expected demand for its COVID products — COVID-19 vaccine, Comirnaty, and its oral antiviral pill for COVID, Paxlovid. Pfizer’s guidance for 2024 includes its expectations from the acquisition of Seagen , which is expected to close today, as all regulatory approvals have been received.
Pfizer records direct sales and alliance revenues from its partner BioNTech (BNTX - Free Report) for Comirnaty and product revenues from Paxlovid.
Pfizer expects total revenues to be in the range of $58.5 to $61.5 billion in 2024, which indicates almost flat growth from 2023’s expected range of $58.0 to $61.0 billion. The range is well short of the Zacks Consensus Estimate of $62.92 billion.
The 2024 revenue guidance includes $8 billion in potential combined revenues for Paxlovid and Comirnaty, well short of our model estimate of approximately $11.7 billion. The number is also significantly lower than the expected combined revenues of $12.5 billion for 2023. The $8 billion combined guidance comprises $5 billion from Comirnaty and $3 billion from Paxlovid.
Sales of Pfizer’s COVID products witnessed a steep decline after the pandemic ended. Pfizer is launching both Comirnaty and Paxlovid in traditional commercial markets in the United States in the hope of reviving sales. However, it does not look like this strategy can lead to much improvement in sales.
The total revenue guidance also includes $3.1 billion in expected revenues from Seagen. Pfizer had offered to buy cancer drugmaker Seagen for approximately $43 billion in March. Seagen’s acquisition is expected to strengthen Pfizer’s portfolio of cancer drugs by addinga class of antibody-drug conjugates. Seagen currently markets four cancer drugs — Adcetris, Padcev, Tukysa and Tivdak. Pfizer expects the acquisition to double the size of its early-stage oncology pipeline over the long term.
The total revenue guidance also includes approximately $1 billion due to the reclassification of Pfizer’s royalty income from Other (Income)/Deductions into the Revenue line.
Excluding revenues from Seagen and the abovementioned reclassification, the revenue guidance for legacy Pfizer is $54.5 to $57.5 billion, which indicates a decline from the expected range for 2023.
Adjusted earnings are expected in the range of $2.05 to $2.25 per share including the expected impact of financing costs related to the Seagen acquisition. The earnings range was also well short of the Zacks Consensus Estimate of $3.10 per share.
However, excluding 40 cents dilution from the Seagen acquisition, adjusted earnings for legacy Pfizer are expected in the range of $2.45 to $2.65 per share.
Pfizer’s shares were down almost 6.7% on Wednesday in response to the muted guidance for 2024. Pfizer’s stock has declined 48.1% so far this year against an increase of 4.5% for the industry.
Image Source: Zacks Investment Research
Excluding COVID-19 products but including Seagen, Pfizer expects its revenues to rise 8% to 10% on an operational basis in 20243 as sales from non-COVID drugs remain strong. Excluding the contribution from COVID-19 products as well as Seagen, operational sales are expected to increase 3%-5%.
With the decline in demand for COVID products, Pfizer announced cost cuts, including layoffs, in August 2023, which it said would deliver targeted savings of at least $3.5 billion. However, the company raised its expectations of savings by $500 million to $4 billion.
Research and development expense is expected in the range of $11.0 to $12.0 billion in 2024. SI&A spending is expected in the range of $13.8 to $14.8 billion. The adjusted tax rate is expected to be approximately 15% in 2024.
Pfizer maintained its previously issued sales and earnings guidance range for 2023 of $58.0-$61.0 billion and $1.45-$1.65 per share, respectively.
Another COVID-19 vaccine maker, Moderna (MRNA - Free Report) , is also seeing declining sales and profits due to weak demand for its only marketed product, an mRNA-based COVID-19 vaccine. Moderna and Pfizer were the first two companies to give the world vaccines for COVID-19. The profits that Moderna generated from its COVID products boosted its cash resources, which is now helping it accelerate its pipeline development.
Zacks Rank
Pfizer currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Pfizer Inc. Price and Consensus
Pfizer Inc. price-consensus-chart | Pfizer Inc. Quote