Pfizer (PFE) stock is trading near an 11-year low as the drugmaker hopes for its next big breakthrough after developing the first Covid vaccine with Germany BioNTech (BNTX).
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Recently, the European Commission approved Pfizer’s Prevnar 20 vaccine to help protect babies and children from pneumococcal disease. The company also recently announced that its new drug Adcetris – thanks to its $43 billion acquisition of Seagen in December – had significantly improved the overall survival of patients with a form of lymphoma. Pfizer is now seeking its eighth approval of Adcentris by the Food and Drug Administration.
In fact, Pfizer says its cancer drug pipeline could potentially lead to eight new blockbuster drugs by 2030. Seagen plays a key role in this. The company is an expert in the production of antibody-drug conjugates (ADCs). These targeted drugs send toxic chemicals directly to cancer cells.
Pfizer recently announced that its respiratory syncytial virus vaccine, Abrysvo, has been shown to be effective against RSV A and B over two seasons. The company also presented promising results in people ages 18 to 59 with underlying health conditions. Pfizer competes against GSK (GSK)’s Arexvy, which launched around the same time in 2023.
However, there are several negative factors weighing on Pfizer stock. Sales of its Covid products – which put Pfizer in the spotlight in 2020 – continue to decline. The company had also hoped to enter the weight-loss battle with executives Novo Nordisk (NVO) and Eli Lilly (LLY). In December, Pfizer eliminated its twice-daily pill because of unexpectedly high rates of nausea and vomiting.
So all in all, is PFE stock a buy or a sell right now?
Pfizer Stock Fundamentals: Surprise Earnings
For the fourth quarter, Pfizer reported unexpected profit of 10 cents per share, excluding some items. This dashed expectations of a loss of 18 cents per share. Revenues fell 91% year over year. The profit was driven by better-than-expected gross margins and low research and development expenses.
Sales also fell 41% to $14.25 billion, missing forecasts of $14.37 billion. Excluding the impact of Covid products, the Comirnaty vaccine and the oral antiviral Paxlovid, operational sales increased 8%.
In addition to expected declines in Comirnaty and Paxlovid, revenue from pneumococcal vaccine Prevnar fell 8% to $1.61 billion. This fell far short of the forecasts. Sales of the cancer drugs Ibrance and Xtandi were also low.
On the other hand, sales of the blood thinners Eliquis and Vyndaqel exceeded expectations. Vyndaqel treats a condition in which abnormal protein builds up in the heart. Revenue rose 41% to $961 million. Eliquis, which was developed in collaboration with Bristol Myers Squibb (BMY) had revenue of $1.61 billion, up 9%.
For the first quarter, Pfizer stock analysts forecast earnings of 53 cents per share and revenue of $14.01 billion. Profits are expected to fall 57% as revenue falls more than 23%.
Investors are advised to look for stocks that have recent sales and earnings growth of 20-25%. Pfizer is not achieving these goals. Large institutional investors – which account for up to 70% of all market transactions – typically look for stocks with accelerating earnings and revenue growth.
Annual key figures of a pharmaceutical company
Pfizer’s sales have fallen significantly since hitting a record high in 2022. Last year, sales fell 42% to almost $58.5 billion. Top sellers included Comirnaty and Paxlovid, which brought in $11.22 billion and $1.28 billion, respectively, although sales fell 70% and 93% year-over-year.
Blood thinner Eliquis generated sales of $6.75 billion, up 4% on a reported-only basis. Prevnar’s revenue rose 2% to $6.44 billion.
However, there were declines in other important products. Sales of Xeljanz, which treats inflammatory diseases, fell 5% to $1.7 billion. Distributed by Enbrel, developed with Amgen (AMGN) plunged 17% to $830 million. Pfizer sells Enbrel outside the United States and Canada.
For 2024, Pfizer expects adjusted earnings of $2.05 to $2.25 per share and revenue of $58.5 billion to $61.5 billion. At the midpoint, profits would rise nearly 17% while sales rise nearly 3%.
Pfizer stock and latest news
In March, Pfizer announced that its new drug Adcetris improved overall survival, progression-free survival and overall response rates in patients with diffuse large B-cell lymphoma. Progression-free survival indicates how long patients live before their cancer worsens. The company added Adcentris to standard cancer drugs lenalidomide and rituximab. It compared therapy with lenalidomide and rituximab plus a placebo.
“The results are particularly encouraging because the study examined heavily pretreated patients, including some who had previously received CAR-T therapy,” Pfizer Chief Development Officer Roger Dansey said in a statement. CAR-T drugs are developed using a patient’s own immune cells.
Promisingly, Pfizer announced in February that its RSV vaccine Abrysvo had demonstrated 77.8% effectiveness over two years against lower respiratory tract infections in adults aged 60 and older. This is part of an ongoing final study in the Northern and Southern Hemispheres. That’s down from 88.9% effectiveness over one year, but still shows “sustained” effectiveness, Pfizer said in a news release.
Pfizer also recently received European Commission approval for Velsipity for patients aged 16 years and older with moderately to severely active ulcerative colitis. The drug is approved for people who have not responded or have stopped responding to other treatments for the gastrointestinal disease.
Technical analysis: PFE stock crosses 50-day line
Pfizer shares are trading well below their 200-day moving average and are again below their 50-day line, MarketSurge.com shows. It is important to note that the stocks do not form a chart pattern for investors to observe.
On April 18, shares hit their lowest level since January 2013.
(Related: Keep an eye on chart patterns by visiting IBD’s MarketSmith.com.)
Pfizer shares have a composite rating of 19 out of a best possible 99. The metric weights a stock’s key growth metrics in comparison to all other stocks. According to IBD Digital, leading stocks tend to have a Composite Rating of 95 or better.
Pfizer stock has a Relative Strength Rating of 15 out of a best possible 99. The RS Rating measures a stock’s 12-month rolling performance compared to all other stocks. This RS rating means Pfizer stock ranks in the bottom 15% of all stocks in terms of performance over the last year.
The pharmaceutical company’s EPS rating, a measure of profitability, is 35 out of a maximum of 99 points. The EPS rating compares a stock’s recent and longer-term earnings growth to that of all other stocks.
So is PFE stock a buy or a sell?
Based on smart investing rules, PFE stock is not a buy right now.
Pfizer stock has yet to demonstrate its fundamental and technical value. Additionally, the stocks are not forming a chart pattern with a clear entry for investors, although they have recently regained ground and briefly reached their 50-day line. Now shares are below that cap.
It will be important to watch how Pfizer stock performs as the company strengthens its pipeline and files for new approvals to move beyond the astronomical growth it experienced at the height of the pandemic. Although, like its competitors, there is a booster vaccination against Covid Modern (MRNA) and Novavax (NVAX) analysts do not expect an increase in sales.
Instead, The Street is closely watching the adult RSV vaccine, which was launched at the same time as a GSK competitor. Pfizer’s efforts now that it owns Seagen could also be crucial for future growth.
For the best stocks to buy and watch, check out IBD Stock Lists. Make sure you also keep track of the stocks you want to buy or sell.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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