As Pfizer faces a period of volatility, here’s my stock plan
The numbers from Pfizer (PFE) are excellent. Guidance? Meh. Pfizer released the company’s first quarter financial results on Tuesday morning.
Pfizer posted adjusted EPS of $1.62 (GAAP EPS of $1.37) on revenue of $25.7 billion. These numbers exceeded expectations for both revenue and net income, while sales were good enough for year-over-year growth of 77% and operational growth of 82%. Ex-contributions of the Covid Comirnaty mRNA vaccine and the Covid Paxlovid treatment tablet, operational growth fell to 2%. Net profit rose 61% to $7.864 billion. Revenue from direct sales and Comirnaty-related alliances was $13.23 billion, up 282.3% from the first quarter of 2021.
Vaccines revenue (including Comirnaty) increased 205.3% (not comparable) to $14.941 billion.
Hospital revenue (including Paxlovid) increased 69% to $3.191 billion.
Oncology revenue (including Ibrance) increased 4% to $2.967 billion
Internal Medicine revenue (including Eliguis) fell 6% to $2.44 billion
Rare disease revenue increased 17% to $963 million.
Inflammation & Immunology (including Xeljanz) revenue decreased 23% to $821 million.
Pfizer CenterOne revenue fell 13% to $338 million.
Chairman and CEO Albert Bourla commented in the press release on Pfizer’s two now most famous offerings, as well as the company’s place in the world… “We continue to supply the world with Comirnaty, which remains an essential tool to help patients and civil societies avoid the worst impacts of the Covid-19 pandemic, and we are on track to meet our commitment to deliver at least 2 billion doses to low- and middle-income countries in 2021 and 2022, including at least 1 billion doses this year. , we are meeting our production commitments for Paxlovid, which is already having a profound impact on the lives of patients.”
Bourla adds a comment on the war in Europe… “In response to the devastating war in Ukraine, and as a company dedicated to promoting human health, we have chosen to continue to provide the people of Russia with the medicines he needs, and donating all profits from our Russian branch to humanitarian efforts in Ukraine.”
Pfizer reaffirmed its full-year 2022 revenue guidance of $98 billion to $102 billion, including about $2 billion of negative currency impacts. While the company stuck to that forecast, Wall Street rose about $107 billion for that figure. Pfizer also reaffirmed its full-year revenue guidance of $32 billion for Corminaty, including a negative currency impact of $1 billion. Pfizer also reaffirmed full-year 2022 revenue guidance of $22 billion for Paxlovid, including a negative currency impact of $500 million. This is despite disappointing late-stage data regarding transmission from a clinical study involving 3K adults living with household contacts already infected with SARS-CoV-2.
The company also cut its full-year outlook for Adjusted EPS to $6.25 to $6.45 from the previous guidance of $6.35 to $6.55, and relative to the Wall Street consensus. of about $7.15.
Pfizer was the first to offer a vaccine against Covid thanks to its German partner BioNTech (BNTX). The vaccine remains arguably the best, and almost certainly the most available defense against severe illness and hospitalizations associated with the SARS-CoV-2 coronavirus. How long the original vaccines retain some level of effectiveness against the still-mutating virus and how long protection persists after being vaccinated or given a booster shot are question marks. There will have to be an adjustment made to this and other vaccines at some point.
As for Paxlovid, the only three people I know who took the drug after being infected thought it helped. Although Paxlovid disappointed in how it prevents infection, it seems (at least from here) to help once infected. Paxlovid sells for about 25% less than Molnupiravir, which is the competing antiviral developed by Merck (MRK). It might help with the sale.
The stock is borderline “oversold” as the Full Stochastics oscillator appears to be in a much more difficult situation than Relative Strength. Readers will then see that the stock appears to have found some support at a rough 50% retracement from the February 2021 low to the December 2021 high, the most important technical development in my opinion is the convergence of the trendline lower upside (February 2021 – present), and the upper trendline sloping down (December 2021 – present).
This signals to me an upcoming period of volatility. This would be interesting because PFE works with a beta of only 0.76. I keep this stock for a long time. Bought it in agony when I was suffering from a pretty bad case of Covid in early 2020 followed by a very long and very nasty fight with Long Covid which lasted into 2021. I stayed long since. So, I’m still up over 40% on this one despite the stock dropping over 22% since December. I don’t plan to sell it now. Pfizer pays shareholders $1.60 a year (3.34% return) just to stay.
My current package
– Target price: $61 (former high)
– Pivot: $49 (200 days SMA)
– Add: $45 (2022 low)
– Panic: $43 (break of 2022 low)
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