Pfizer (PFE) said it expects $33.5 billion in full-year sales of it Covid vaccine, leading Pfizer stock to a three-year high.
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Meanwhile, the company could ask for emergency authorization of a booster shot next month and is soon planning to begin testing a specific shot for the Covid delta variant. The company also beat quarterly forecasts and has shrugged off intellectual property concerns.
In August, reports emerged suggesting the Food and Drug Administration is under pressure to fully approve the Pfizer/BioNTech (BNTX) and Moderna (MRNA) shots. Other reports suggested the companies raised the prices of their vaccines in new contracts.
But, recently, the FDA warned against increased risk of heart inflammation in recipients of the messenger RNA vaccines from Pfizer/BioNTech and Moderna.
Later this year, Pfizer expects to have the results of studies in children ages 6 months to 11 years old. The possible need for booster shots could further extend vaccine sales. As of late July, Pfizer said it had inked deals for 2.1 billion doses this year.
So, all in all, is Pfizer stock a buy?
Pfizer Stock Fundamentals: Earnings Strong
In the second quarter, adjusted Pfizer earnings were $1.07 per share, soaring 73% year over year. Sales rocketed 92% to $18.98 billion. Both measures beat forecasts.
The company’s Covid vaccine brought in $7.8 billion in sales.
Revenue from blood thinner Eliquis, breast cancer drug Ibrance and pneumonia vaccine each beat second-quarter expectations. Less bullishly for Pfizer stock, sales of inflammation drug Xeljanz declined due to ongoing safety concerns.
On a segment basis, sales of rare disease treatments posted the best growth — rising 32%. Sales of drugs called Vyndaqel/Vyndamax soared 81% to $501 million.
Overall, total second-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 third quarter. Analysts polled by FactSet call for adjusted income of $1.07 a share and $22.24 billion in sales, up a respective 49% and 83%.
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 2021, analysts surveyed by FactSet call for Pfizer to earn $4.02 a share, minus some items, up about 81%. Sales are expected to pop about 86% to $78.09 billion.
In the second quarter, Pfizer raised its full-year outlook to $78 billion to $80 billion in sales and adjusted earnings of $3.95-$4.05 a share. The revenue guidance includes $33.5 billion in Covid vaccine sales.
PFE Stock News: Xeljanz Study Hits Hard
Pfizer stock tumbled close to 3% on a single January day 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 FDA to analyze the results.
The news slugged AbbVie (ABBV) too. In late June, the FDA delayed its review of AbbVie drug, Rinvoq, in patients with two forms of arthritis, citing its ongoing review of Pfizer’s Xeljanz.
More bullishly, in June, Pfizer said its drug, tofacitinib, lowered the risk of death or respiratory failure in patients hospitalized with Covid.
Pfizer Stock And Coronavirus Vaccine News
Shares rose on July 9 after Pfizer and BioNTech said they’re testing a third dose of their Covid shot against the delta variant. The companies plan to start testing a delta-specific vaccine in August.
But Pfizer stock fell 1.4% on June 23 after the U.S. Centers for Disease Control and Prevention said there’s a link between Covid shots from Pfizer and Moderna and heart inflammation. The rare illness has occurred primarily in young men. The European Medicines Agency warned against the condition on July 14.
Pfizer has said it had inked contracts for roughly 2.1 billion doses of its coronavirus vaccine in 2021. On May 10, BioNTech said it expects to hit a manufacturing capacity of 3 billion this year, and to top 3 billion in 2022.
At six months, the companies’ vaccine is 91.3% effective against Covid-19, Pfizer said in early April. The vaccine was also 100% effective in South Africa, where a new strain is prevalent. However, in July, Israel’s Ministry of Health said the vaccine was only 64% effective in a real-world study as the delta variant became more prevalent. It was still highly effective against severe disease.
Further, the FDA has said Pfizer and BioNTech can transport and store their Covid vaccine at more standard freezer temperatures. On May 10, the FDA authorized the companies’ Covid vaccine for emergency use in teens ages 12-15. European officials followed on May 28.
In September, Pfizer expects to have the test results of its Covid vaccine in children ages 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 companies are also actively submitting data to the FDA in the hopes of securing a full approval.
Technical Analysis: PFE Stock Forms New Base
Pfizer stock topped a cup-with-handle base with a buy point at 41.19 on July 20. Shares are now well beyond the 5% chase zone.
Shares retook their 50-day line on July 9, and remain above their 200-day line.
(Related: Keep tabs on chart patterns by visiting IBD’s MarketSmith.com.)
Shares of Pfizer have Composite Rating of 96. 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 Relative Strength Rating of 71 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 71% of all stocks in terms of performance.
The pharmaceutical company’s EPS Rating, a measure of profitability, is a 73 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. Shares are well beyond their buy zone, which runs from 41.19-43.25. It’s best to buy a stock once it tops a buy point and is within the 5% chase zone.
The company is expected to report bullish growth in the third quarter, putting it in line with CAN SLIM advice. But that follows a poor year-earlier comparison at the height of the pandemic.
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 deals with the growing prevalence of the delta variant.
To find the best stocks to buy and watch, check out IBD Stock Lists. Make sure to also keep tabs on stocks to buy or sell.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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