Down 9% in 2021, is it time to take Pfizer stock higher?

Pfizer, Inc. (PFE) stock has lost 9% so far this year as investors expected better financial results from the established biopharmaceutical company for its final quarter (ended December 31, 2020). In addition, competition is intensifying on the coronavirus vaccine front; Johnson & Johnson’s single-dose vaccine (JNJ) recently became the third COVID-19 vaccine to receive Emergency Use Clearance (EUA) from the FDA.

However, we believe the drop in prices provides a good entry point for PFE as it is a strong player based on its large portfolio of COVID and non-COVID products, and its many strategic acquisitions over the years. In fact, the stock has gained 11.8% over the past three years.

Additionally, PFE is expected to generate huge revenues from its COVID-19 vaccine, as people may need to receive regular boosters to maintain their immunity to the virus.

Here are the factors that we believe could influence PFE’s performance in the short term:

Growing demand for COVID-19 vaccine

Since it was announced in November 2020 that the COVID-19 vaccine candidate based on PFE and BIONTECH SE (BNTX) mRNA, COMIRNATY (also known as BNT162b2), was more than 95% effective against COVID-19 , companies have stepped up their vaccine production to meet demand more quickly.

After receiving the EUA from the FDA, the companies announced that they had signed a second agreement with the US government to provide an additional 100 million doses. The companies also announced an agreement with the European Commission (EC) on February 17, 2021 to provide an additional 200 million doses of COMIRNATY.

Wide range of non-COVID 19 products

PFE and EMD Serono, the biopharmaceutical business of Merck KGaA (MKKGY), announced in January 2021 that the European Commission (EC) had approved Bavencio as monotherapy for the first-line maintenance treatment of adult patients with carcinoma Locally advanced or progressing metastatic urothelial -free after platinum-based chemotherapy.

In addition, last month the FDA approved the supplemental biologic license application for PANZYGA from PFE, which is used to treat adult patients with a rare neurological disease of the peripheral nerves called chronic inflammatory demyelinating polyneuropathy (CIDP). . The FDA has also approved the company’s XALKORI, which is the first biomarker-based treatment for relapsed or refractory ALCL in young people.

Updated assessment

In terms of non-GAAP futures price / earnings, PFE is currently trading at 10.05x, 58.5% lower than the industry average 24.23x. In terms of enterprise value / forward sales, the stock’s 3.90x is 50.1% lower than the industry average 7.81x. The share’s futures price / sell of 3.03x is also below the industry average of 8.48x.

Favorable analyst estimates

Analysts expect the company’s revenue to grow 12.7% for the current quarter ending March 31, 2021 and 31.2% for the quarter ending June 30, 2021. Its EPS is expected to increase. increase by 11.5% for the quarter ending June 30, 2021, 48.6% during fiscal 2021 and at a rate of 10.6% per annum over the next five years.

Wall Street analysts expect the stock to hit $ 41.09 in the near term, indicating a potential rise of nearly 22%.

POWR ratings show promise

PFE has an overall rating of B, which is equivalent to Buy in our POWR rating system. POWR scores are calculated by considering 118 different factors, each factor being weighted to an optimal degree.

Our proprietary scoring system also rates each stock against eight different categories. Of these categories, PFE has a B rating for value in line with lower valuation ratios than the industry.

The stock also has a B grade for quality. This is consistent with the stock’s 12-month gross profit margin of 79.5% compared to the industry average of 56.9%.

Click here to access PFE’s ratings for Growth, Momentum, Stability and Sentiment.

PFE is ranked n ° 27 out of 240 stocks in the medical – pharmaceutical sector.

There are several other top rated stocks in the same industry. Click here to access it.

At the end of the line

The stock of PFE has declined 9% year-to-date and 4.2% over the past year due to increasing competition on the coronavirus vaccine front. But the PFE is by no means a stock to be ignored. In fact, we believe that the discounted valuation of the stock offers a good entry point for investors who wish to profit from the long-term growth of the company.

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PFE shares were trading at $ 34.21 per share on Wednesday afternoon, up $ 0.70 (+ 2.09%). Year-to-date, the EFP has fallen -6.05%, compared to a 2.60% increase in the benchmark S&P 500 over the same period.

About the Author: Manisha Chatterjee

Since she was young, Manisha has had a strong interest in the stock market. She majored in economics in college and has a passion for writing, which led to her career as a research analyst. After…

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