[Updated: 7/28/2021] Pfizer Earnings Update
Pfizer (NYSE: PFE) today reported its Q2 results, which were below our expectations but beat the consensus estimates. The company reported revenues of $19.0 billion, lower than our forecast of $21.7 billion, and above the $18.5 billion consensus estimate. Our forecast was driven by higher contribution of Pfizer’s Covid-19 vaccine, which came in at $7.8 billion. Looking at the bottom line, the company reported adjusted EPS of $1.07, compared to $1.12 per Trefis and $0.96 per the consensus estimate.
We have forecast the Covid-19 vaccine sales to be nearly $35 billion in 2021, compared to $26 billion per Pfizer’s earlier guidance. However, the company has now revised this guidance upward to $33.5 billion. So far, the company has recorded sales of $11.3 billion from its Covid-19 vaccine, implying another $22.2 billion expected over the next two quarters. Overall, it appears that the Covid-19 vaccine continues to drive the company’s top and bottom line expansion for now, but leaving that aside, revenue grew 10%, led by strong growth in biosimilars and alliance revenues. We will update our model to reflect the recently announced numbers. The street is likely to take these numbers on a positive note, given that Pfizer has also revised its full-year earnings outlook upward. Trefis estimates Pfizer’s Valuation to be around $50 per share, which is nearly 20% above the current market price of around $42.
[Updated: 7/26/2021] Pfizer Q2 Earnings Preview
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
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.