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Here's How to Play Pfizer (PFE) Stock Ahead of Q1 Earnings
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Pfizer (PFE - Free Report) will report first-quarter 2024 results on May 1, before market open.
The Zacks Consensus Estimate for the drug giant’s first-quarter revenues stands at $13.86 billion, while the same for earnings per share is pegged at 56 cents, both indicating significant declines from the year-ago quarter.
Pfizer’s top-line numbers in the first quarter of 2024 will include revenues from the acquisition of Seagen, which closed in mid-December 2023. The acquisition added Seagen’s antibody-drug conjugates or ADCs — Adcetris, Padcev, Tukysa and Tivdak — to Pfizer’s cancer portfolio.
Excluding Seagen revenues, Pfizer’s revenues are expected to have declined in the first quarter of 2024 due to steep declines 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 declining due to lower demand, some key non-COVID products like Prevnar, Vyndaqel and Eliquis, new launches like Abrysvo, Penbraya and Zavzpret, and newly acquired products like Nurtec as well as those acquired from Seagen are expected to have boosted the top line in the first quarter.
Pfizer’s stock has declined 35.2% in the past year against an increase of 16% for the industry.
Image Source: Zacks Investment Research
With a projected decline in both top and bottom-line figures, Pfizer is definitely not a stock to buy right now. What about those investors who already own the stock? Should they sell Pfizer’s stock ahead of first-quarter results?
First, a single quarter’s results should never form the basis of investing, staying invested or even selling the stock of a blue-chip company like Pfizer. The idea is to delve deep into the stock’s growth prospects.
During the pandemic, Pfizer gave the world the first and most widely used vaccine, BioNTech-partnered 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.
2023 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’s new products/late-stage pipeline candidates, coupled with newly acquired products, including those acquired from Seagen, position it strongly for operational growth in 2025 and beyond. Pfizer expects 2025 to 2030 revenue CAGR to be approximately 6%.
Pfizer expects the acquisition of Seagen to contribute more than $10 billion in 2030 risk-adjusted revenues with potential significant growth beyond 2030. ADC drugs are being considered a disruptive innovation in the pharmaceutical industry as these will allow it to better treat cancer by harnessing the targeting power of antibodies to deliver cytotoxic molecule drugs to tumors.
Among the newer drugs, all eyes are on the Abrysvo RSV vaccine. Sales of Abrysvo were above management’s expectations in the second half of 2023, driven by strong demand. We expect sales to remain strong in 2024. Recently, a phase III study evaluating Abrysvo for expanded use in adults aged 18 to 59 met its primary endpoints. However, Abrysvo faces strong competition from GSK’s (GSK - Free Report) RSV vaccine, Arexvy. This was the first RSV vaccine for older adults to be approved anywhere in the world. GSK’s Arexvy had an exceptional launch and generated £1.2 billion in sales in 2023.
Conclusion
Though in 2021/2022, no company was as strongly placed in the COVID vaccines/treatment market as Pfizer, once the pandemic ended, Pfizer’s 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 also faced a key pipeline setback last year when, in December, it halted phase III studies on its twice-daily weight loss pill, danuglipron, due to side effects seen in a phase IIb study.
Though one should refrain from buying Pfizer stock right now, investors may stay invested in the stock for a year or so rather than selling it. As it works to move beyond the gains it saw during the pandemic, investors can watch how the company’s new products and pipeline perform and their impact on the stock price performance. We believe that 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 Zacks Consensus Estimate for earnings has risen from $2.21 to $2.23 per share for 2024 and from $2.76 to $2.77 per share for 2025 over the past 30 days.
Image: Bigstock
Here's How to Play Pfizer (PFE) Stock Ahead of Q1 Earnings
Pfizer (PFE - Free Report) will report first-quarter 2024 results on May 1, before market open.
The Zacks Consensus Estimate for the drug giant’s first-quarter revenues stands at $13.86 billion, while the same for earnings per share is pegged at 56 cents, both indicating significant declines from the year-ago quarter.
Pfizer’s top-line numbers in the first quarter of 2024 will include revenues from the acquisition of Seagen, which closed in mid-December 2023. The acquisition added Seagen’s antibody-drug conjugates or ADCs — Adcetris, Padcev, Tukysa and Tivdak — to Pfizer’s cancer portfolio.
Excluding Seagen revenues, Pfizer’s revenues are expected to have declined in the first quarter of 2024 due to steep declines 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 declining due to lower demand, some key non-COVID products like Prevnar, Vyndaqel and Eliquis, new launches like Abrysvo, Penbraya and Zavzpret, and newly acquired products like Nurtec as well as those acquired from Seagen are expected to have boosted the top line in the first quarter.
Pfizer’s stock has declined 35.2% in the past year against an increase of 16% for the industry.
Image Source: Zacks Investment Research
With a projected decline in both top and bottom-line figures, Pfizer is definitely not a stock to buy right now. What about those investors who already own the stock? Should they sell Pfizer’s stock ahead of first-quarter results?
First, a single quarter’s results should never form the basis of investing, staying invested or even selling the stock of a blue-chip company like Pfizer. The idea is to delve deep into the stock’s growth prospects.
During the pandemic, Pfizer gave the world the first and most widely used vaccine, BioNTech-partnered 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.
2023 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’s new products/late-stage pipeline candidates, coupled with newly acquired products, including those acquired from Seagen, position it strongly for operational growth in 2025 and beyond. Pfizer expects 2025 to 2030 revenue CAGR to be approximately 6%.
Pfizer expects the acquisition of Seagen to contribute more than $10 billion in 2030 risk-adjusted revenues with potential significant growth beyond 2030. ADC drugs are being considered a disruptive innovation in the pharmaceutical industry as these will allow it to better treat cancer by harnessing the targeting power of antibodies to deliver cytotoxic molecule drugs to tumors.
Among the newer drugs, all eyes are on the Abrysvo RSV vaccine. Sales of Abrysvo were above management’s expectations in the second half of 2023, driven by strong demand. We expect sales to remain strong in 2024. Recently, a phase III study evaluating Abrysvo for expanded use in adults aged 18 to 59 met its primary endpoints. However, Abrysvo faces strong competition from GSK’s (GSK - Free Report) RSV vaccine, Arexvy. This was the first RSV vaccine for older adults to be approved anywhere in the world. GSK’s Arexvy had an exceptional launch and generated £1.2 billion in sales in 2023.
Conclusion
Though in 2021/2022, no company was as strongly placed in the COVID vaccines/treatment market as Pfizer, once the pandemic ended, Pfizer’s 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 also faced a key pipeline setback last year when, in December, it halted phase III studies on its twice-daily weight loss pill, danuglipron, due to side effects seen in a phase IIb study.
Though one should refrain from buying Pfizer stock right now, investors may stay invested in the stock for a year or so rather than selling it. As it works to move beyond the gains it saw during the pandemic, investors can watch how the company’s new products and pipeline perform and their impact on the stock price performance. We believe that 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 Zacks Consensus Estimate for earnings has risen from $2.21 to $2.23 per share for 2024 and from $2.76 to $2.77 per share for 2025 over the past 30 days.
Pfizer currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.