Pfizer (PFE) stock is trading at a nine-year low as the drugmaker looks for its next big break after developing the first Covid vaccine with Germany's BioNTech (BNTX).
XLast month, the European Commission approved Pfizer's Prevnar 20, a vaccine to help protect babies and children from pneumococcal disease. The company also recently said its new drug Adcetris — courtesy of its $43 billion takeover of Seagen in December — significantly improved overall survival in patients with a form of lymphoma. Pfizer is now angling for Adcentris' eighth Food and Drug Administration approval.
In fact, Pfizer says its pipeline of cancer drugs could lead to a potential eight new blockbuster medicines by 2030. Seagen is a key part of that. The company is an expert in making antibody drug conjugates, or ADCs. These targeted medicines send toxic chemicals directly to cancer cells.
Pfizer recently said its respiratory syncytial virus vaccine, Abrysvo, proved effective against both RSV A and B across two seasons. The company also unveiled promising results in people age 18 to 59 years old with underlying conditions. Pfizer is competing against GSK (GSK)'s Arexvy, which hit the market about the same time in 2023.
But, there are several bearish factors plaguing Pfizer stock. Revenue from its Covid products — which prodded Pfizer into the limelight in 2020 — continues to decline. The company had also hoped to enter the weight-loss melee with leaders Novo Nordisk (NVO) and Eli Lilly (LLY). In December, Pfizer scrapped its twice-daily pill due to 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 Profit
For the fourth quarter, Pfizer reported an unexpected profit of 10 cents per share, minus some items. That flipped expectations for an 18-cent loss per share. Earnings tumbled 91% year over year. The profit was due to better-than-expected gross margins and low research and development spending.
Sales also plummeted 41% to $14.25 billion and missed forecasts for $14.37 billion. Excluding the impact of Covid products, vaccine Comirnaty and oral antiviral Paxlovid, sales climbed 8% operationally.
In addition to the expected declines for Comirnaty and Paxlovid, revenue from pneumococcal vaccine Prevnar slipped 8% to $1.61 billion. That widely missed projections. Sales from cancer drugs Ibrance and Xtandi also came in light.
On the flip side, revenue from blood thinner Eliquis and Vyndaqel beat expectations. Vyndaqel treats a condition in which abnormal protein builds up on the heart. Sales climbed 41% to $961 million. Eliquis, which was developed in partnership with Bristol Myers Squibb (BMY), brought in $1.61 billion in sales, up 9%.
For the first quarter, Pfizer stock analysts forecast earnings of 53 cents per share and $14.09 billion in sales. Earnings are expected to dive 57% as sales tumble almost 23%.
Investors are encouraged to seek stocks with 20%-25% recent sales and earnings growth. Pfizer is not hitting those marks. Big institutional investors — who account for up to 70% of all market trades — usually look for stocks with accelerating earnings and sales growth.
Pharmaceutical Company's Annual Metrics
Pfizer's sales have fallen markedly since hitting a record in 2022. Last year, sales tumbled 42% to nearly $58.5 billion. Top sellers included Comirnaty and Paxlovid, which brought in a $11.22 billion and $1.28 billion, though sales tumbled a respective 70% and 93% year over year.
Blood thinner Eliquis generated $6.75 billion in sales, up 4% on a strict, as-reported basis. Prevnar sales inched 2% ahead to $6.44 billion.
But other key products saw downfalls. Revenue from Xeljanz, which treats inflammatory conditions, fell 5% to $1.7 billion. Sales of Enbrel, developed with Amgen (AMGN), toppled 17% to $830 million. Pfizer sells Enbrel outside the U.S. and Canada.
For 2024, Pfizer expects adjusted earnings of $2.05 to $2.25 per share and $58.5 billion to $61.5 billion in sales. At the midpoints, earnings would climb almost 17% as sales rise almost 3%.
Pfizer Stock And Recent News
In March, Pfizer said 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 is how long patients live before their cancer worsens. The company added Adcentris to standard cancer drugs lenalidomide and rituximab. It compared the regimen to lenalidomide and rituximab plus a placebo.
"The results are particularly encouraging because the study evaluated heavily pre-treated patients, including some who received prior CAR-T therapy," Pfizer's Chief Development Officer Roger Dansey said in a statement. CAR-T drugs are developed using a patient's own immune cells.
Promisingly, Pfizer said in February its RSV vaccine, Abrysvo, proved 77.8% effective over two years against lower respiratory tract infection in adults age 60 and older. This is part of an ongoing final-phase study in the Northern and Southern hemispheres. That's a drop from 88.9% effectiveness over a year, but still shows "durable" effectiveness, Pfizer said in a news release.
Pfizer also recently won European Commission approval for Velsipity for patients age 16 and older with moderately to severely active ulcerative colitis. The drug is approved for people who didn't respond to or stopped responding to other treatments for the gastrointestinal condition.
Technical Analysis: PFE Stock Tops 50-Day Line
Pfizer stock is trading far below its 200-day moving average and is once again below its 50-day line, MarketSurge.com shows. It's important to note that shares are not forming a chart pattern for investors to watch.
On April 17, shares hit their lowest point since January 2013.
(Related: Keep tabs on chart patterns by visiting IBD's MarketSmith.com.)
Shares of Pfizer have a Composite Rating of 17 out of a best-possible 99. 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 has a Relative Strength Rating of 15 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 bottom 15% of all stocks in terms of performance over the last year.
The pharmaceutical company's EPS Rating, a measure of profitability, is 34 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 Or A Sell?
Based on savvy rules of investing, PFE stock isn't a buy right now.
Pfizer stock still has to prove its fundamental and technical merit. Also, shares aren't forming a chart pattern with a clear entry for investors, despite recently regaining ground and briefly retaking their 50-day line. Now, shares are below that ceiling.
It will be important to watch how Pfizer stock performs as the company shores up its pipeline and seeks new approvals in its efforts to move beyond the astronomical growth it saw at the height of the pandemic. Though it has a booster Covid shot, like rivals Moderna (MRNA) and Novavax (NVAX), analysts don't expect sales to climb.
Instead, the Street is closely watching the adult RSV vaccine, which hit the market at the same time as a competitor from GSK. Pfizer's efforts now that it owns Seagen could also be key to future growth.
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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