Pfizer Stock Has Risen 11% In A Month But Will The Gains Continue?

by Trefis Team
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[Updated: 8/3/2021] PFE Stock Update

The stock price of Pfizer (NYSE: PFE) has seen an 11% rise over the last twenty-one trading days, and most of the gains have come over the last ten trading days, after the company reported strong Q2 results, and revised its full-year outlook upward. Note that such a move for PFE stock is uncommon, and it has occurred less than 60 times over the last 10 years. Pfizer continues to see strong sales from its Covid-19 vaccine, which remains the key growth driver. The vaccine garnered $7.8 billion in sales during Q2 2021, and it will likely add another $24 billion to the company’s top-line over the next two quarters, in our view.

However, now that PFE stock has seen a rise of 11% in twenty-one trading days, will it continue its upward trajectory, or is a fall imminent? Going by historical performance, there is almost an equal chance of a rise or a fall in PFE stock over the next month. Out of 58 instances in the last ten years that PFE stock saw a twenty-one day rise of 11% or more, 30 of them resulted in PFE stock rising over the subsequent one month period (twenty-one trading days). This historical pattern reflects 30 out of 58, or about 52% chance of a rise in PFE stock over the coming month. See our analysis on Pfizer Stock Chances of A Rise for more details. While the 52% chance means the stock could go in either direction, Trefis estimates Pfizer’s Valuation to be around $50 per share, which is nearly 14% above the current market price of around $44, implying that there is more room for growth in PFE stock.

Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using last ten years data

  • After moving 5.1% or more over a five-day period, the stock rose in the next five days only on 49% of the occasions.
  • After moving 9.5% or more over a ten-day period, the stock rose in the next ten days on 57% of the occasions
  • After moving 11.0% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 52% of the occasions.

Predict average return on Pfizer (PFE) Stock Return: AI Predicts PFE Average and Excess Return After a Fall or Rise

Pfizer (PFE) Stock Return (Recent) Comparison With Peers

  • Five-Day Return: PFE highest at 5.1%; MRK lowest at -1.4%
  • Ten-Day Return: PFE highest at 9.5%; MRK lowest at -1.1%
  • Twenty-One Days Return: PFE highest at 11%; MRK lowest at -2.3%

 

[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.

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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