Pfizer stock briefly broke out in early May after the company called for $26 billion in full-year Covid vaccine sales.
But shares later fell after President Joe Biden and U.S. Trade Representative Ambassador Katherine Tai voiced support for waiving the patent rights protecting Covid vaccines. The goal is to allow other countries the chance to make their own vaccines.
The news slammed vaccine stocks, including Pfizer (PFE) which broke out on May 3 after sales and earnings topped first-quarter forecasts. The company also raised its full-year outlook, partially on bullish sales of its BioNTech (BNTX)-partnered Covid shot.
Next, Pfizer plans to ask for full Food and Drug Administration approval of the Covid-19 vaccine. This would allow the vaccine to stay on the market post-pandemic. Pfizer and BioNTech could also market directly to consumers and change the vaccine’s price.
Later this year, Pfizer expects to have the results of studies in children age 6 months to 11 years old. The possible need for booster shots could further extend vaccine sales. As of mid-April, Pfizer said it had inked deals for 1.6 billion doses this year.
So, all in all, is Pfizer stock a buy?
Pfizer Stock Fundamentals: Earnings Strong
In the first quarter, adjusted Pfizer earnings were 93 cents per share, growing 47% vs. the year-ago period. Sales soared 45% to $14.58 billion. Both measures easily beat forecasts.
The company’s Covid vaccine brought in $3.46 billion in sales.
Less bullish for Pfizer stock, sales of pneumonia vaccine Prevnar 13 declined 11% to $1.28 billion. Sales of cancer drug Ibrance were flat at $1.25 billion. And both missed estimates, Mizuho Securities analyst Vamil Divan said in a note to clients.
But sales of rare-disease drugs Vyndaqel/Vyndamax nearly doubled to $453 million. And anticoagulant Eliquis, partnered with Bristol Myers Squibb (BMY), generated $1.64 billion in sales. That was an increase of 26% year over year.
Overall, total first-quarter growth was also in line with CAN SLIM rules for investing. Investors are encouraged to seek stocks with 20%-25% recent sales and earnings growth. Big institutional investors — who account for up to 70% of all market trades — usually look for stocks with accelerating earnings and sales growth.
That trend is expected to continue in the second quarter. Analysts polled by FactSet call for adjusted income of 94 cents per share and $17.5 billion in sales, up a respective 57% and 49% year over year.
Pharmaceutical Company’s Annual Metrics
Pfizer’s sales popped 2% last year to $41.91 billion. That excluded the Upjohn unit, which Pfizer merged with Mylan to create Viatris (VTRS). The Upjohn business housed Pfizer’s older drugs, including those facing generic competition.
That growth still lagged Pfizer’s last year of strong gains in 2010. Then, sales jumped 34%.
Top sellers in 2020 included Ibrance, which generated $5.39 billion in sales, up 9%. Sales of blood thinner Eliquis popped 17% to $4.95 billion. But revenue from Prevnar 13 was flat at $5.85 billion.
Xeljanz, which is facing scrutiny for a recent post-marketing study, generated $2.44 billion, rising 9%. Vyndaqel and Vyndamax, which treat a condition that can cause heart failure, brought in $1.29 billion.
For the 2021 fiscal year, analysts surveyed by FactSet call for Pfizer to earn $3.30 a share, minus some items, up 49%. Sales are expected to pop 58% to $66.2 billion. Pfizer predicts adjusted earnings of $3.55-$3.65 per share and $70.5 billion to $72.5 billion in sales.
PFE Stock News: Xeljanz Study Hits Hard
Pfizer stock tumbled 2.9% on Jan. 27 after the company said rheumatoid arthritis drug Xeljanz failed to outperform a rival medicine in a post-marketing study. The test was performed in patients age 50 and older at risk of a cardiovascular event, like a heart attack.
Xeljanz only had to prove it wasn’t inferior to the rival drug, known as a TNF inhibitor. That didn’t happen. Now, Pfizer said it’s working with the Food and Drug Administration to analyze the results.
The news slugged AbbVie (ABBV) too. The FDA recently requested additional safety information from AbbVie before it will consider a similar drug, Rinvoq, in patients with psoriatic arthritis and eczema.
Pfizer Stock And Coronavirus Vaccine News
Pfizer has inked contracts for roughly 1.6 billion doses of its coronavirus vaccine in 2021, and says it can make up to 2 billion. At six months, the vaccine is 91.3% effective against Covid-19, the company said in early April.
The vaccine was also 100% effective in South Africa, where a new strain is prevalent.
Further, the FDA has said Pfizer and BioNTech can transport and store their Covid vaccine at more standard freezer temperatures.
In September, Pfizer expects to have the test results of its Covid vaccine in children age 2-5 and 5-11. It will then ask for emergency authorization for those groups. In November, the company expects to have data from tests in children age 6 months to 2 years.
The company also says it plans to ask for full approval of its Covid vaccine later this month.
Like Moderna (MRNA), Pfizer and BioNTech are also testing out a booster to the original vaccine. The two vaccines both use messenger RNA technology, or mRNA, which tells the body to make a single spike protein, mimicking the outside of the virus.
Novavax‘s (NVAX) two-shot regimen was 96.4% effective against the original strain. Meanwhile, AstraZeneca (AZN) said its vaccine was 76% effective in a U.S. study. But neither vaccine is authorized in the U.S.
Technical Analysis: PFE Stock Briefly Breaks Out
Pfizer stock broke out of a cup-with-handle base with a buy point at 39.77 on May 3. Shares stayed within a buy zone on May 4-5, but toppled on May 6. Still, Pfizer stock only fell as much as 4.6%. That wasn’t enough to trigger a sell rule, which usually happens when a stock tumbles 7%-8% below its entry.
(Related: Keep tabs on chart patterns by visiting IBD’s MarketSmith.com.)
Shares of Pfizer have a poor IBD Composite Rating of 67. The 1-99 measure pits a stock’s key growth measures against all other stocks. Leading stocks tend to have CRs of 95 or better, according to IBD Digital.
Pfizer stock also has a weak IBD Relative Strength Rating of 35 out of a best-possible 99. The RS Rating measures a stock’s 12-month running performance against all other stocks. That RS Rating means Pfizer stock tops 35% of all stocks in terms of performance.
The pharmaceutical company’s EPS Rating, a measure of profitability, is a 70 out of a best-possible 99. The EPS Rating compares a stock’s recent and longer-term earnings growth against all other stocks.
So, Is Pfizer Stock A Buy Right Now?
Based on CAN SLIM rules of investing, Pfizer stock isn’t a buy right now. But it could be if shares return to their buy zone.
The company is expected to report bullish growth in the second quarter, putting it in line with CAN SLIM advice.
It is important to keep tabs on how Pfizer stock performs as it develops a coronavirus vaccine with BioNTech. Results appear promising so far, but it will be important to see how the company ramps its manufacturing now that it has authorization in the U.S. and other countries.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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