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Pfizer Stock Falls 8% in a Month: Should You Buy the Dip?
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Pfizer’s (PFE - Free Report) stock has declined 7.8% in the past month. Though the stock has been affected by declining sales of its COVID products, a lot of this stock price decline could be due to the broader drug/biotech sector’s decline in the past month. Lower-than-expected sales of Lilly (LLY - Free Report) and Novo Nordisk’s (NVO - Free Report) popular diabetes and obesity drugs in the third quarter, guidance cuts, pipeline setbacks and the appointment of Robert F. Kennedy Jr., a vaccine skeptic, as head of Health and Human Services (HHS) have taken a toll on drug and biotech stocks.
The decline in PFE’s stock price and the drug/biotech sector’s downturn in the past month have left investors wondering whether to buy, sell or hold PFE’s stock. Let’s understand the company’s strengths and weaknesses to better analyze how to play PFE’s stock following the latest dip.
Sales of PFE’s COVID Products Declining
Sales of Pfizer’s COVID products, Comirnaty and Paxlovid, declined steeply in 2023 due to lower demand following the end of the pandemic. In 2024, revenues from Paxlovid and Comirnaty continue to decline. The 2024 revenue guidance includes $10.5 billion in potential combined revenues for Paxlovid and Comirnaty, which is lower than the combined revenues of $12.5 billion for 2023. However, sales of both products were significantly more than expected in the third quarter. There is an element of uncertainty associated with sales of COVID-19 products as it depends on infection rates.
PFE’s New Drugs & Seagen Acquisition to Drive Growth
Though COVID revenues are declining, Pfizer’s non-COVID operational revenues improved in the first three quarters of 2024, driven by its key in-line products like Vyndaqel and Eliquis, new launches like Abrysvo, newly acquired products like Nurtec as well as those acquired from Seagen (December 2023). The trend is expected to continue in the fourth quarter and probably in 2025.
Pfizer’s new products/late-stage pipeline candidates and 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%.
PFE Enjoys a Strong Position in Oncology
Pfizer is one of the largest and most successful drugmakers in the field of oncology. Its position in oncology was strengthened with the addition of Seagen, which generated sales of $2.3 billion in the first nine months of 2024, up 38% on a proforma basis. Pfizer expects the acquisition of Seagen to contribute more than $10 billion in 2030 risk-adjusted revenues with potential significant growth beyond 2030.
Oncology sales comprise more than 26% of Pfizer’s total revenues. Its oncology revenues grew 26% on an operational basis in the first nine months of 2024, driven by drugs like Xtandi, Lorbrena, Braftovi-Mektovi combination and Padcev. Pfizer has ventured into the oncology biosimilars space and markets six biosimilars for cancer. Pfizer also advanced its oncology clinical pipeline in 2024, with several candidates entering late-stage development. By 2030, it expects to have eight or more blockbuster oncology medicines in its portfolio.
Pfizer’s stock has declined 12.4% in the past six months compared with a decrease of 8.7% for the industry.
PFE Stock Underperforms Industry
Image Source: Zacks Investment Research
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 company shares currently trade at 8.67 forward earnings, lower than 17.05 for the industry and the stock’s mean of 11.33. The stock is also much cheaper than other large drugmakers like AbbVie (ABBV - Free Report) , Novo Nordisk and Lilly.
PFE Stock Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for earnings per share has risen from $2.62 to $2.91 for 2024 over the past 60 days, while that for 2025 has risen from $2.84 to $2.91.
PFE Estimate Movement
Image Source: Zacks Investment Research
Long-Term Investors Can Buy PFE Stock
After a couple of tough years, it seems that Pfizer’s worst slowdown is over now, and the company is gradually making a comeback.
Pfizer faces its share of challenges, the key being declining sales of its COVID-19 products. Pfizer also expects a significant impact from the loss of patent exclusivity in the 2026-2030 period, as several of its key products will face patent expirations. However, its non-COVID drugs and potential contribution from new and newly acquired products have started to drive growth, with the trend expected to continue.
Its dividend yield stands at more than 6%, which is quite impressive. Also, Pfizer expects cost cuts and internal restructuring to deliver savings of at least $5.5 billion. Huge profits from its COVID products strengthened its cash position. The funds are being used to make acquisitions, increase dividends, buy back shares and reduce debt.
Consistently rising estimates indicate investors’ optimistic outlook for growth. Those who own this stock may stay invested to see how Pfizer’s new growth drivers perform. Investors with a long-term horizon may consider buying this Zacks Rank #2 (Buy) stock at the present attractive valuation. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Pfizer Stock Falls 8% in a Month: Should You Buy the Dip?
Pfizer’s (PFE - Free Report) stock has declined 7.8% in the past month. Though the stock has been affected by declining sales of its COVID products, a lot of this stock price decline could be due to the broader drug/biotech sector’s decline in the past month. Lower-than-expected sales of Lilly (LLY - Free Report) and Novo Nordisk’s (NVO - Free Report) popular diabetes and obesity drugs in the third quarter, guidance cuts, pipeline setbacks and the appointment of Robert F. Kennedy Jr., a vaccine skeptic, as head of Health and Human Services (HHS) have taken a toll on drug and biotech stocks.
The decline in PFE’s stock price and the drug/biotech sector’s downturn in the past month have left investors wondering whether to buy, sell or hold PFE’s stock. Let’s understand the company’s strengths and weaknesses to better analyze how to play PFE’s stock following the latest dip.
Sales of PFE’s COVID Products Declining
Sales of Pfizer’s COVID products, Comirnaty and Paxlovid, declined steeply in 2023 due to lower demand following the end of the pandemic. In 2024, revenues from Paxlovid and Comirnaty continue to decline. The 2024 revenue guidance includes $10.5 billion in potential combined revenues for Paxlovid and Comirnaty, which is lower than the combined revenues of $12.5 billion for 2023. However, sales of both products were significantly more than expected in the third quarter. There is an element of uncertainty associated with sales of COVID-19 products as it depends on infection rates.
PFE’s New Drugs & Seagen Acquisition to Drive Growth
Though COVID revenues are declining, Pfizer’s non-COVID operational revenues improved in the first three quarters of 2024, driven by its key in-line products like Vyndaqel and Eliquis, new launches like Abrysvo, newly acquired products like Nurtec as well as those acquired from Seagen (December 2023). The trend is expected to continue in the fourth quarter and probably in 2025.
Pfizer’s new products/late-stage pipeline candidates and 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%.
PFE Enjoys a Strong Position in Oncology
Pfizer is one of the largest and most successful drugmakers in the field of oncology. Its position in oncology was strengthened with the addition of Seagen, which generated sales of $2.3 billion in the first nine months of 2024, up 38% on a proforma basis. Pfizer expects the acquisition of Seagen to contribute more than $10 billion in 2030 risk-adjusted revenues with potential significant growth beyond 2030.
Oncology sales comprise more than 26% of Pfizer’s total revenues. Its oncology revenues grew 26% on an operational basis in the first nine months of 2024, driven by drugs like Xtandi, Lorbrena, Braftovi-Mektovi combination and Padcev. Pfizer has ventured into the oncology biosimilars space and markets six biosimilars for cancer. Pfizer also advanced its oncology clinical pipeline in 2024, with several candidates entering late-stage development. By 2030, it expects to have eight or more blockbuster oncology medicines in its portfolio.
PFE’s Stock Performance, Rising Estimates & Attractive Valuation
Pfizer’s stock has declined 12.4% in the past six months compared with a decrease of 8.7% for the industry.
PFE Stock Underperforms Industry
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 company shares currently trade at 8.67 forward earnings, lower than 17.05 for the industry and the stock’s mean of 11.33. The stock is also much cheaper than other large drugmakers like AbbVie (ABBV - Free Report) , Novo Nordisk and Lilly.
PFE Stock Valuation
The Zacks Consensus Estimate for earnings per share has risen from $2.62 to $2.91 for 2024 over the past 60 days, while that for 2025 has risen from $2.84 to $2.91.
PFE Estimate Movement
Long-Term Investors Can Buy PFE Stock
After a couple of tough years, it seems that Pfizer’s worst slowdown is over now, and the company is gradually making a comeback.
Pfizer faces its share of challenges, the key being declining sales of its COVID-19 products. Pfizer also expects a significant impact from the loss of patent exclusivity in the 2026-2030 period, as several of its key products will face patent expirations. However, its non-COVID drugs and potential contribution from new and newly acquired products have started to drive growth, with the trend expected to continue.
Its dividend yield stands at more than 6%, which is quite impressive. Also, Pfizer expects cost cuts and internal restructuring to deliver savings of at least $5.5 billion. Huge profits from its COVID products strengthened its cash position. The funds are being used to make acquisitions, increase dividends, buy back shares and reduce debt.
Consistently rising estimates indicate investors’ optimistic outlook for growth. Those who own this stock may stay invested to see how Pfizer’s new growth drivers perform. Investors with a long-term horizon may consider buying this Zacks Rank #2 (Buy) stock at the present attractive valuation. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.