Case Study on Pfizer (PFE) with Nobias technology
Summary
President Biden recently announced that the COVID-19 pandemic is ending in the United States.
Pfizer shares are down by more than 22% on a year-to-date basis.
Despite this weakness, the majority of recent articles that Nobias tracks on the stock recently have been bullish and the average price target being applied to shares by credible Wall Street analysts implies upside potential of approximately 25%.
Pfizer (PFE) has been one of the major beneficiaries of the COVID-19 pandemic. This stock’s yearly earnings-per-share have skyrocketed from $2.79 in 2019 to the $6.40 area today. Prior to PFE’s recent sell-off its shares had risen from approximately $37.00 at the start of 2020 to recent highs in the $62.00 range. And yet, PFE is currently trading well off of those highs.
PFE shares have fallen by more than 22% during 2022 thus far, pushing this former market darling down into bear market territory. However, the negative sentiment that currently surrounds shares has not changed the bullish opinions being expressed by credible authors and analysts when it comes to PFE shares. The majority of recent articles that Nobias tracks on the stock recently have been bullish and the average price target being applied to shares by credible Wall Street analysts implies upside potential of approximately 25%.
PFE Sep 2022
In early September, Paul Best, a Nobias 5-star rated author, published a bullish report on Pfizer at Yahoo Finance, highlighting the approval of a new COVID-19 vaccine. Best wrote, “Centers for Disease Control and Prevention Director Rochelle Walensky gave the final sign off for updated COVID-19 vaccines targeting the omicron strain on Thursday.” He continued, “Moderna's updated vaccine was approved for people ages 18 and older, while Pfizer's was approved for people ages 12 and older.”
Best said that, “BA.5, a subvariant of omicron, is responsible for about 89% of new coronavirus infections, according to CDC data.”With this in mind, he quoted Walensky on the importance of those new vaccines, who said, "They can help restore protection that has waned since previous vaccination and were designed to provide broader protection against newer variants.”
However, Best also pointed out that the pandemic appears to be waning. He wrote, “COVID-19 cases have steadily declined since mid-July, with the 7-day moving average falling from 130,387 new cases on July 16 to 85,761 on Aug. 31.”
So, while new approvals open up the door for continued COVID-19 revenue from Pfizer, it appears as if this multi-year tailwind is coming to an end. John Dylan, a Nobias 5-star rated author, also recently published a bullish report on PFE, titled, “Best Stocks To Buy Now? 4 Biotech Stocks In Focus”.
Dylan highlighted the fact that Pfizer is much more than just a COVID-19 vaccine play. He said, “Pfizer Inc. (PFE) is an American multinational pharmaceutical corporation. For starters, Pfizer develops and produces medicines and vaccines for a wide range of medical disciplines, including immunology, oncology, cardiology, diabetes/endocrinology, and neurology.”
Dylan also noted that Pfizer offers a high dividend yield, stating, “Today, Pfizer offers its shareholders an annual dividend yield of 3.34%.” Furthermore, he touched upon the stock’s recent “stronger-than-expected” earnings results as another bullish tailwind for shares.
Dylan wrote, “The company posted earnings of $2.04 per share, with revenue of $27.7 billion. This beat analysts’ estimates that were earnings of $1.75 per share and revenue of $26.0 billion. Additionally, Pfizer reported an increase in revenue by 46.2% during the same period, in 2021.” He continued, highlighting PFE’s re-affirmed guidance, stating, “The company said it estimates 2022 earnings of $6.30 to 6.45 per share. Meanwhile, the company also reaffirmed its revenue outlook of $98.0 billion to $102.0 billion.”
This earnings-per-share guidance calls for approximately 45% growth when compared to PFE’s $4.42 2021 full-year EPS, showing the strong growth that this company is producing. And, despite this good news, PFE shares have struggled recently, falling by 8.6% during the last month.
As Kinjel Shah, a Nobias 4-star rated author, points out in a recent Zacks article, this weakness is due, in part, to President Biden recently announcing that the pandemic in the U.S. is coming to an end. Shah wrote, “The stocks of companies making COVID-19 vaccines and medicines declined on Monday after U.S. President Joe Biden said that the pandemic is over in the United States in an interview over the weekend on “60 Minutes” on CBS News.”
Shah continued, “The President said that though there was still a problem with COVID and a “lot of work” was going on for that, the pandemic was over. He said that the fact that no one is wearing masks suggests the pandemic is over in the country.”
Furthermore, Shah said, “Though the World Health Organization still considers COVID-19 a pandemic, its director general Tedros Adhanom Ghebreyesus said last week that the world is in a better position to end the pandemic. He went on to say that the end of the pandemic was in sight.”
Nicholas Ward is a Senior Investment Analyst at Wide Moat Research. He has spent the last 8 years writing about the stock market at various publications, including Seeking Alpha, The Street, Forbes Real Estate Investor, Sure Dividend, The Dividend Kings, iREIT, Safe High Yield, and The Intelligent Dividend Investor.
“However,” the author continued, “public health officials still consider the pandemic a health emergency and warn of a possible surge in infections in the fall and winter months. Thousands of people are being infected from the virus every day. Death rates from COVID are more than 400 per day, which though significantly down from a peak of more than 3,000 in late January 2021 and 2,600 in February 2022, are still quite high.”
Regarding Pfizer’s prospects, Shah said, “If the pandemic ends, the demand for COVID-19 vaccines and other medicines will decline, which will significantly hurt these companies’ [referring to Pfizer, Moderna, and BioNTech] sales and profits.”
Yet, the author stated, “Pfizer and BioNTech have seen a major influx of cash from their vaccine/medicine sales. They can use the cash for more research and can successfully develop new products to make up for lost revenues from COVID products.”
Looking at the consensus opinions provided by the credible authors and credible Wall Street analysts that the Nobias algorithm tracks, it appears that both groups believe that the end of the COVID-19 pandemic will not stop Pfizer’s share price appreciation. 62% of recent articles published by credible authors on Pfizer have expressed a “Bullish” bias. Right now, the average price target that the credible analysts have attached to PFE shares is $55.20. Today, PFE shares trade for $44.08. Therefore, this average price target implies upside potential of 25.2%.
Disclosure: Nicholas Ward is long PFE. Nicholas Ward wrote this article for Nobias at their request with a view of giving investors a balanced perspective based on the writings of Nobias highly rated analysts and bloggers. Nobias has no business relationship with any company whose stock is mentioned in this article and does not have a position in this stock.
Additional disclosure: All content is published and provided as an information source for investors capable of making their own investment decisions. None of the information offered should be construed to be advice or a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. The information offered is impersonal and not tailored to the investment needs of any specific person.
Disclaimer: The Nobias star rating is based on past performance results and is not an indicator of future results. These past performance returns do not represent returns that any investor actually earned. Assumptions made include the ability to purchase the stocks recommended by the author under liquid markets where the transaction would be at the market price for the day. In reality, loss in liquidity may have a material impact on the returns that actually may have been earned. Further, returns are calculated without any including transaction costs, management fees, performance fees or expenses, or reinvestment of dividends and other income. This information is provided for illustrative purposes only.