Is Pfizer Stock Set To See Higher Levels Post Q2 Results?

July 26th, 2021 by Trefis Team
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Pfizer

Pfizer (NYSE: PFE) is scheduled to report its Q2 2021 results on Wednesday, July 28. We expect the company to likely post revenue and earnings well above the consensus estimates, primarily led by its Covid-19 vaccine. Pfizer should see an overall pickup in pharmaceutical demand due to an increase in hospital visits with economies opening up gradually. We expect the company to navigate well based on these trends over the latest quarter.

Furthermore, we also think PFE stock remains attractive at the current valuation. Trefis’ forecast indicates that Pfizer’s valuation is $50 per share, which is 19% above the current market price of $42. Our interactive dashboard analysis on Pfizer’s Pre-Earnings has additional details.

(1) Revenues expected to be above the consensus estimates

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Trefis estimates Pfizer’s Q2 2021 revenues to be around $21.7 billion, 17% above the $18.5 billion consensus estimate. Now that the economies are opening up with vaccination programs underway in multiple countries, pharmaceutical companies will likely benefit from an increase in the volume of new patient starts. For Pfizer, its Covid-19 vaccine remains the key growth driver in the near term, with 2021 annual sales projected to be as high as $35 billion, per Trefis estimates. Pfizer’s Q1 2021 sales were up 42% y-o-y to $14.6 billion, primarily driven by $3.5 billion sales from its Covid-19 vaccine, and the contribution of this vaccine is expected to be much higher in Q2. Our dashboard on Pfizer Revenues offers more details on the company’s segments.

2) EPS likely to be also above the consensus estimates

Pfizer’s Q2 2021 adjusted earnings per share (EPS) is expected to be $1.12 per Trefis analysis, 17% above the consensus estimate of $0.96. Pfizer’s adjusted net income of $5.3 billion in Q1 2021 reflected a 48% rise from its $3.5 billion figure in the prior-year quarter, due to higher revenues as well as margin expansion. For the full year 2021, we expect the adjusted EPS to be higher at $4.75 compared to $2.22 in 2020.

(3) Stock price estimate 19% above the current market price

Going by our Pfizer’s Valuation, with an EPS estimate of $4.75 and a P/E multiple of 10x in 2021, this translates into a price of $50, over 19% higher than the current market price of $42. While the 10x figure is lower than the levels of over 14x seen in 2018 and 16x as recently as late 2020, this can be attributed to the fact that Pfizer’s EPS will be very high in 2021, followed by a decline from 2022 onward, with a slowdown in Covid-19 vaccine sales. Look at our Pfizer Covid-19 Vaccine Updates for more details.

Note: P/E Multiples are based on Share Price at the end of the year and reported (or expected) Adjusted Earnings for the full year.

While PFE stock looks attractive at its current levels, 2020 has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Mettler vs Abbott.

See all Trefis Price Estimates and Download Trefis Data here

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