Pfizer stock trended sideways in early June as the company planned to invest $120 million to boost production of its Covid antiviral pill in the U.S.
Bearishly, Pfizer (PFE) also announced disappointing test results for its blockbuster drug, Ibrance, combined with another drug called letrozole in women with a form of breast cancer. Patients lived longer while taking the combination, but the results weren’t statistically significant.
A Food and Drug Administration panel is also scheduled this month to discuss the risks and merits of Pfizer and BioNTech‘s (BNTX) Covid vaccine in children younger than age 5. The same meeting will feature Moderna‘s (MRNA) under-6 shot.
Officials have also signed off on a second Covid booster for people age 50 and older from Pfizer and Moderna. But Pfizer’s guidance for $98 billion to $102 billion in full-year sales — including a total $54 billion from its Covid products — lagged expectations for close to $106 billion.
Also promisingly, the FDA accepted Biohaven Pharmaceuticals‘ (BHVN) application for a new migraine treatment, zavegepant. Pfizer is buying Biohaven’s CGRP assets for nearly $12 billion. CGRP is a peptide associated with migraines.
Further, Pfizer is spending $525 million to buy ReViral. The deal adds to Pfizer’s efforts targeting respiratory syncytial virus, which leads to lower respiratory tract infections. Pfizer also wants to vaccinate against the virus, which can be deadly in the very young and very old.
Pfizer has a gene-editing deal with Beam Therapeutics (BEAM), and deals with Codex DNA (DNAY) and privately held Acuitas Therapeutics to bolster messenger RNA efforts — the technology behind its Covid shot.
So, all in all, is PFE stock a buy?
Pfizer Stock Fundamentals: Earnings Strong
In the first quarter, adjusted Pfizer earnings were $1.62 per share on $25.66 billion in sales. Earnings surged 72% and sales rocketed 77%. Both beat projections. Comirnaty sales were $13.2 billion, above forecasts. Paxlovid brought in $1.5 billion in sales, below expectations.
Pneumonia vaccine Prevnar and blood thinner Eliquis topped forecasts, and grew a respective 59% and 12% operationally. But sales of arthritis drug Xeljanz tumbled 29%. In the U.S., revenue from breast cancer med Ibrance fell 5%.
Overall, total first-quarter growth lined up with CAN SLIM rules for investing. But excluding the impact of Comirnaty and Paxlovid, sales inched just 2% higher. Investors are encouraged to seek stocks with 20%-25% recent sales and earnings growth.
Big institutional investors — who account for up to 70% of all market trades — usually look for stocks with accelerating earnings and sales growth.
That trend is expected to continue in the second quarter. Analysts polled by FactSet call for adjusted income of $1.80 a share and $25.62 billion in sales, rising a respective 68% and 35%.
Pharmaceutical Company’s Annual Metrics
Pfizer’s sales popped 95% to $81.29 billion in 2021. Top sellers included vaccines and its cancer treatment business. Overall, vaccine sales were $42.63 billion. Comirnaty brought in 86% of that. Cancer treatments generated $12.33 billion, up 13%.
But Pfizer’s inflammation and immunology sales fell 3% to $4.43 billion. Revenue from Enbrel, an Amgen (AMGN)-partnered treatment for inflammatory conditions, tumbled 12% to $1.19 billion.
For 2022, analysts surveyed by FactSet call for Pfizer to report earnings of $6.74 a share, minus some items, up 52.5%. Analysts call for sales to pop 28% to $103.69 billion. Pfizer expects $98 billion to $102 billion in sales and adjusted earnings of $6.25-$6.45 per share.
Pfizer Stock And Coronavirus Vaccine News
The FDA signed off on Pfizer’s Covid booster for children age 5-11. In recent testing, a booster dose in this group led to a 36-fold increase in antibodies capable of blocking omicron. The agency also allows people age 50 and older, and immunocompromised people as young as 12, to get second boosters.
Now, Pfizer and BioNTech are working to secure authorization for their three-dose vaccine in babies as young as 6 months to children under age 5. The shot is one-tenth the dose given to older children and adults. It proved as effective as a two-dose regimen in people age 16-25.
Pfizer and BioNTech are working on an omicron-specific booster.
On the antiviral side, Pfizer tested Paxlovid in unvaccinated Covid patients at risk of developing severe disease. It cut down on hospitalizations by 89% when patients started treatment within three days of symptoms beginning. No Paxlovid recipients died.
In people with a standard risk of severe disease, the regimen cut down on hospitalization by 70%. There were also no deaths among these Paxlovid recipients.
The results were better than Merck (MRK) and Ridgeback Biotherapeutics’ rival pill, molnupiravir, which reduced hospitalizations by 30%. One molnupiravir patient died. Molnupiravir also carries the risk of cancer or passing birth defects onto unborn children in pregnant women.
Technical Analysis: PFE Stock Eyes Buy Point
PFE is consolidating with buy point at 61.81, according to MarketSmith.com. The stock was well above its 50-day and 200-day moving averages on June 6.
(Related: Keep tabs on chart patterns by visiting IBD’s MarketSmith.com.)
Shares of Pfizer have a nearly perfect Composite Rating of 98. The measure weighs a stock’s key growth metrics against all other stocks. Leading stocks tend to have Composite Ratings of 95 or better, according to IBD Digital.
Pfizer stock also has a Relative Strength Rating of 91 out of a best-possible 99. The RS Rating measures a stock’s 12-month running performance against all other stocks. That RS Rating means Pfizer stock ranks in the top 9% of all stocks in terms of performance.
The pharmaceutical company’s EPS Rating, a measure of profitability, is a 89 out of a best-possible 99. The EPS Rating compares a stock’s recent and longer-term earnings growth against all other stocks.
So, Is PFE Stock A Buy Right Now?
Based on CAN SLIM rules of investing, PFE stock isn’t a buy right now. It’s consolidating, but shares have yet to break out. Investors are encouraged to buy a stock when it rises above and is within 5% of its entry.
The company is expected to grow bullishly in the second quarter, keeping it in line with CAN SLIM advice. But that will mostly come on the back of its Covid products.
It’s important to keep tabs on how Pfizer stock performs as Covid moves into its endemic phase. Results appear promising so far, but it will be important to see how the company deals with the dominance of the omicron variant.
To find the best stocks to buy and watch, check out IBD Stock Lists. Make sure to also keep tabs on stocks to buy or sell.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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