Pfizer (NYSE:PFE) stock has missed out on the exuberant bull market this year, as the indexes have hit all-time highs, but Pfizer stock has fallen about 10% in 2019.
Then again, the company’s growth has been lagging, and PFE has felt pressure from Washington, DC to reduce its drug prices.
But next week we’ll get more information on the status of the company, as it will report its first-quarter results. They will be announced on Apr. 30 before the market opens.
Analysts’ expectations for Pfizer stock are fairly muted. For the quarter, on average they predict that its revenues will be $13 billion and its earnings will be 75 cents per share of Pfizer stock By comparison, in the same period a year ago, its revenues were $12.9 billion and its earnings were 77 cents per share.
It’s important to keep in mind that, when PFE last reported its financial results, it provided full-year revenue guidance of $52 billion to $54 billion. Last year, its top line came in at $53.6 billion.
The big issue for Pfizer stock has been its pain killer, Lyrica. This drug, which generated close to $5 billion of revenue last year, will lose its patent protection in June. Moreover, the sales of a number of PFE’s other drugs have slowed this year.
But PFE’s pipeline does look promising, creating potential positive catalysts for PFE stock. Last quarter, the company announced several positive catalysts involving its pipeline. Specifically:
- Pfizer and Bristol-Myers Squibb (NYSE:BMY) have been developing a new version of Eliquis, which has been shown to effectively treat the bleeding of heart attack patients. A recent study of Eliquis indicated that its efficacy in this area was significantly better than that of a warfarin combination.
- The FDA granted a Breakthrough Therapy Designation for Pfizer’s 20-Valent Pneumococcal Conjugate Vaccine (20vPnC). The treatment is supposed to prevent people from getting pneumonia, and it appears to be much more effective than the vaccines that are currently on the market.
- The European Commission approved VIZIMPRO, which is a treatment for locally advanced or metastatic non-small cell lung cancer (NSCLC).
- In Q1, Pfizer continued its big push into the gene-therapy market. The company announced that it had created a partnership with Vivet Therapeutics. The companies will focus on developing a treatment for Wilson disease , a rare condition that leads to copper poisoning.
- The FDA approved Pfizer’s TRAZIMERA, a treatment for breast cancer.
Going forward, a number of Pfizer’s major drugs, including Xeljanz and Ibrance., should be approved as treatments for additional diseases. Furthermore, the sales of several other Pfizer treatments –including atopic dermatitis treatments tafamidis and abrocitinib, as well as pain medication tanezumab – could surge tremendously.
The Bottom Line on Pfizer Stock
Pfizer stock is trading at reasonable levels, as its forward price-earnings ratio is below 13. That’s in-line with the valuations of other mega pharma operators like Merck (NYSE:MRK) and GlaxoSmithKline (NYSE:GSK).
Pfizer also has a long history of being shareholder-friendly. The dividend yield of PFE stock is 3.4% and the company continues to buyback large amounts of Pfizer stock. PFE bought back $12.2 billion of PFE stock last year.
However, there probably will not be any near-term catalysts for PFE stock. The political pressure will remain an overhang on Pfizer stock, especially as we get closer to the presidential election. Meanwhile, it will take some time for the company’s pipeline to boost its revenue and profits. As a result, investors shouldn’t rush to buy Pfizer stock.
Tom Taulli is the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.