Pharmaceutical giant Pfizer Inc. New York Stock Exchange: PFE Shares are trading below levels near pandemic lows. Every time it tries to break the $30 mark, something causes the stock to fall back down. Despite the discouraging price action, the healthcare giant remains one of the world’s largest research-based biopharmaceutical companies. Eli Lilly and Co. New York Stock Exchange: LLI.
Pfizer shares are trading at a bargain price with forward earnings of just 9.1 times and a tasty annual dividend yield of 6.46%. Here are four more reasons to consider these stocks for your portfolio.
1) Pfizer resumed growth again
Pfizer stock forecast today
$32.14
Growth potential 21.16%Hold
Based on ratings from 17 analysts
| High forecast | $45.00 |
|---|---|
| Average forecast | $32.14 |
| Low forecast | US$25.00 |
Pfizer stock forecast details
Revenue fell in five of the last six quarters before the third-quarter report was released. In its third-quarter 2024 earnings report, Pfizer reported earnings of $1.06 per share, easily beating the consensus estimate by 45 cents. Its revenues grew 32% YoY to $17.7 billion, completely beating the consensus estimate of $14.92 billion. The revenue growth reflected a 32% YoY increase in operating activities, or $4.3 billion, primarily through contributions to the growth of Covid-19 antiviral treatment Paxlovid and acquired products. The increase in COVID-19 cases over the summer has led to a surge in COVID-19 vaccines and treatments.
Excluding contributions from COVID-19 treatments, Paxlovid and Comirnaty COVID-19 vaccines, revenue would have increased by $1.7 billion, or 14% year over year. Cost savings should generate at least $5.5 billion from previously announced cost reduction initiatives.
Pfizer continues dose optimization studies of its oral GLP-1 receptor agonist candidate, Danuglipron. It is an oral once-daily GLP-1 receptor agonist in phase 1, and its oral small molecule GIPR antagonist is advancing in phase 2 studies.
2) Pfizer is focused on its oncology business
Pfizer is focused on growing its oncology business, driven by its $43 billion acquisition of powerhouse Seagen. Critics and Starboard activists were very unhappy that Pfizer overpaid for Seagen, which is expected to generate revenue of only about $3.1 billion in 2024.
Pfizer is already the third largest oncology company in the world based on the results of the first half of 2024. Revenue for its breakthrough prostate cancer drug XTANDI rose 28% year-over-year. TALZENNA’s revenue increased by 77% compared to the same period last year. The company reported significant overall survival benefits in its Phase 3 TALAPRO study, which is a combination of TALZENNA and XTANDI. Operating growth for LOBRENA for the treatment of alpositive metastatic noncellular lung cancer in adults was 31%. Multiple myeloma treatment company ELREXFIO delivered 80% sequential revenue growth in Q2 2024.
Pfizer has a strong track record of treating lung cancer, the leading cause of cancer death worldwide. The Company is enrolling patients in a phase 3 clinical trial of MEBROMESTOSTAN, a novel EZH2 inhibitor for men with metastatic castration-resistant prostate cancer. Pfizer is making progress in developing two candidates that will replace its existing HER-positive HER2-negative breast cancer pipeline.
3) Pfizer raised its 2025 forecast and updated its 2025 forecast.
The company raised full-year 2024 earnings per share to $2.75 to $2.95, up from previous guidance of $2.45 to $2.65 versus consensus estimates of $2.66. 2024 revenue is expected to be between $61 billion and $64 billion, up from the previous forecast of $59.5 billion to $62.5 billion, up from $61.13 billion. The updated forecast includes nearly $10.5 billion in expected revenue for Comirnaty ($5 billion) and Paxlovid ($5.5 billion).
On December 17, 2024, Pfizer updated its forecast for 2025. The impact of the Medicare Part D redesign is expected to be $1 billion across its product portfolio in 2025. The new Trump administration is committed to reforming the pharmacy benefit management (PBM) system. industry, but does not expect significant changes in vaccine policy. Prevnar’s revenues are expected to decline slightly in 2025. The company also achieved its goal of cost savings of $4 billion in 2024, with another $500 million expected in 2025.
4) PFE Stock May Try to Break Out of a Descending Triangle Pattern
A descending triangle is typically a bearish chart indicator with lower highs bouncing off flat bottom support. The descending upper trend line converges with the flat lower horizontal support line of the lower trend line at the top point. A breakout is triggered if the stock falls below the lower support of the trend line. A breakout occurs if the stock rises above the upper resistance line.
PFE formed descending upper trendline resistance at the $31.54 swing high, matching the flat lower trendline at $24.46 at the top. PFE initially appeared to break out of the upper trend line on October 9, 2024, but by October 30, the stock fell again and reached the lower trend line on November 15, 2024, before beginning to rally back to the 2020 pandemic low. $26.43. The daily pegged VWAP rises to $25.73. Fibonacci (Fibonacci retracement support levels are located at $25.75, $24.46, $22.45 and $20.36.
Actionable Option Strategies: Bullish investors may consider using cash-backed puts at Fibonacci retracement support levels to buy the dip. If the stock is vested, then writing a covered call at high Fibonacci levels implements a wheel strategy to generate additional income while collecting a massive 6.46% annual dividend yield. The analysts’ consensus price target has an upside of 20.75% to $32.14.
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