Pfizer Stock Sinks To 10-Year Low Why Investors Have Soured On Covid-Era Giant

Pfizer continues to experience a steep decline in sales for COVID-19 vaccine Comirnaty and antiviral drug Paxlovid. The company expects combined sales for the two products in 2024 will total only $8 billion, down from a projected $12.5 billion this year. It’s also important to consider the long-term potential of Pfizer’s coronavirus portfolio. But Pfizer aims to launch a combined coronavirus/influenza vaccine later this decade, and that product could interest people who generally go for an annual flu shot — that’s nearly half of the U.S. population. Even if Pfizer faces competition from Moderna and Novavax, it still could bring in significant recurrent revenue from an eventual combined vaccine.

On Tuesday, Pfizer said it expects regulators to approve its $43 billion acquisition of cancer drug maker Seagen, first announced in May. Seagen will account for about 5% of Pfizer’s 2024 sales, according to Wednesday’s guidance. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation.

1. Pfizer forecasts more than $3 billion in Seagen revenue this year, and as much as $10 billion in 2030.
2. As of Aug. 9, 2021, Pfizer had 5,606,688,356 shares of voting common stock outstanding.
3. Even if Pfizer faces competition from Moderna and Novavax, it still could bring in significant recurrent revenue from an eventual combined vaccine.
4. Even factoring out the drag from its COVID products, the company won’t generate jaw-dropping growth.
5. Before assuming the CEO position in January 2019, he was chief operating officer (COO) starting in January 2018.
6. Since a pandemic is an uncommon situation, we shouldn’t use Pfizer’s revenue levels during peak pandemic times as a comparison point.

It wasn’t long ago that the two products generated combined sales of more than $56.7 billion. Pfizer expects its total COVID sales to be only around https://www.forexbox.info/ $12.5 billion in 2023. Some of these deals — such as Arena — offer Pfizer pipeline candidates, representing future potential launches.

Why Pfizer Stock Is Sinking Today

My view is that Pfizer isn’t likely to rebound until it beats quarterly earnings estimates. I think, though, that the stock should be attractive to income investors with its dividend yield now close to 6.3%. I also expect that Pfizer will return to solid growth once it moves past the challenging year-over-year comparisons for its COVID-19 products. Pfizer projects combined sales of Comirnaty and Paxlovid will be only around $8 billion. The good news for the company is that’s still a sizable amount of money.

If we backed out all of Pfizer’s projected COVID sales, its revenue would be in the ballpark of $52 billion next year. That would give the stock a forward P/S ratio of around 3.08, excluding COVID altogether. Even if Pfizer doesn’t generate one penny in COVID sales in 2024, its stock appears to be dirt cheap, compared to other big biopharma stocks.

Business deals to deliver growth

Other publicly traded Covid vaccine makers have struggled mightily over the last two years as demand and government subsidies for the shots dried up. Shares of Moderna are down roughly 85% from their 2021 high and shares of Johnson & Johnson are down about 15% from their 2022 peak. Pfizer’s foray into weight loss treatments have yet to impress investors, and its stock dove 5% earlier this month after it revealed discouraging clinical results for its GLP-1 drug.

Now, though, with coronavirus product demand falling and losses of exclusivity ahead for some of Pfizer’s other drugs, the company’s revenue is on the decline. And Pfizer’s shares, after climbing to a peak back in 2021, have now dropped nearly 50% from that level. The company traces its origins to the founding of Charles Pfizer & Co. in Brooklyn, N.Y., in 1849 by Charles Pfizer and Charles Erhart. The company expanded during the late 1800s and early 1900s, remaining a privately held company until June 1942, when it offered shares of its common stock to the public for the first time. It was the first mass producer of the “miracle drug” penicillin in the 1940s and was generating more than a billion dollars in sales by the early 1970s. Pfizer has become one of the biggest pharmaceutical companies in the world, with a market capitalization of $251.3 billion as of Nov. 3, 2021.

On May 10, 2021, the FDA expanded the EUA for the Pfizer-BioNTech vaccine to include adolescents ages 12–15. Albert Bourla is the pharmaceutical giant’s current chief executive officer (CEO). Pfizer is classified as a member of the S&P 500 healthcare sector and operates within the biotechnology and pharmaceutical industry. Inc. (MRK), Switzerland-based Roche Holding AG (RHHBY), and Eli Lilly and Co. (LLY). Pfizer reported adjusted net income attributable to its common shareholders of $25.2 billion on $81.3 billion in annual revenue in its 2021 fiscal year (FY). On the other hand, I think that Pfizer is a no-brainer stock to buy right now for two types of investors.

Pfizer Stock Sinks To 10-Year Low—Why Investors Have Soured On Covid-Era Giant

Pfizer expects 2024 revenue of between $58.5 billion and $61.5 billion. This range includes a contribution of around $3.1 billion from the company’s pending acquisition https://www.forex-world.net/ of Seagen. It reflects little to no year-over-year growth from Pfizer, which is on track to generate revenue of $58 billion to $61 billion in 2023.

How many shares of Pfizer stock are there?

But before we start worrying too much about Pfizer’s future, let’s consider what the company is doing now to reignite growth down the road. The company has been preparing for this moment of patent expirations by readying new candidates to ensure future growth. In 2020, Pfizer co-developed with BioNTech SE a vaccine against COVID-19, the virus whose rapid spread prompted the World Health Organization (WHO) to declare a global pandemic in March 2020. On Dec. 11, 2020, the Pfizer-BioNTech vaccine became the first COVID-19 vaccine to receive emergency use authorization (EUA) from the U.S. The vaccine was approved for emergency use for individuals 16 years of age and older.

Income investors should love the company’s dividend yield of over 5.9%. Value investors should salivate at Pfizer’s bargain-basement price. All of this means that Pfizer should be in the middle of a new era of growth 10 years from now. So, today, when the shares are down, is the perfect time to get in on this promising long-term story. The FDA gave the vaccine full approval on Aug. 23, 2021, after reviewing the biologics license application (BLA) submitted by Pfizer and BioNTech.

Others, like Seagen, offer immediate revenue through already approved products, as well as growth potential down the road. Pfizer forecasts more than $3 billion in Seagen revenue this year, and as much as $10 billion in 2030. The big pharma company took center stage earlier in the COVID-19 pandemic when it became the first to launch a coronavirus vaccine. That product, Comirnaty, and the treatment Paxlovid, released later, helped Pfizer’s revenue reach a record level of $100 billion in 2022; the two products made up more than half of that. Still, growth investors will probably find other stocks more attractive than Pfizer. Even factoring out the drag from its COVID products, the company won’t generate jaw-dropping growth.

Pfizer’s shares currently trade at a trailing-12-month price-to-sales (P/S) ratio of 2.37. Based on the company’s guidance for 2024, the stock’s forward P/S multiple is roughly 2.67 (using the midpoint of the guidance range). In fact, right now it’s amid its biggest https://www.currency-trading.org/ string of product launches ever new products or indications released over a period of 18 months. Pfizer expects these products to generate $20 billion in revenue in 2030. There’s no question that Pfizer’s COVID products won’t be its crown jewels going forward.