Fundamental analysis
Pfizer was founded in 1849 by German-American founders Charles Pfizer and his cousin Charles F. Erhart. The company operates in the pharmacology and bioengineering industries. Its main products are drugs and vaccines.
The company is currently in the S&P100 and S&P500, and was also in the Dow Jones Industrial Average until 2020.
The most important drugs according to the company’s sales in 2022 were: Pfizer-BioNTech Covid19 vaccine ($37 billion in sales), Nirmatrelvir/ritonavir ($18 billion in sales), Apixaban ($6 billion in sales). A full 42% of sales are from the US domestic market alone, 8% of sales are from Japan, and the remaining 50% of sales are from the rest of the world.
According to Wall Street analysts, the current recommendation on the stock is “Hold”.
Results
The company’s total turnover was $100.3 billion in 2022. This year was strongly influenced by high demand for the vaccine against COVID-19 disease (37% of sales). Total turnover was up 23% compared to 2021; earnings are not yet disclosed. Despite these positive results, the stock did not grow in 2022. Rather, its price oscillated between USD 40-55 per share.
In 2023, Pfizer expects a 33% drop in demand for COVID vaccines. This decline makes sense as most of the population will only need 1 dose to be re-vaccinated, not multiple doses as in previous years. It can also be assumed that not all people who already have a dose of the vaccine will be re-vaccinated.
Although stable numbers or small increases in demand (mostly up to 5%) are expected for other drugs, the drop in the number of COVID vaccines will have a big impact on Pfizer’s operational performance.
Technical analysis
The company’s beta is 0.59, so its correlation with the S&P500 is not very high. A look at the chart confirms this.
The stock price is currently sitting on two important supports at $41 and $38.50 respectively. Breaking them could mean a clear path to a rapid decline in the stock.
The moving averages are in a downtrend, another indicator of the stock’s poor performance.
Conclusion
After an excellent and profitable year in 2022, the company expects sales and demand for its products to decline. The stock is more likely to decline during 2022 despite the published results, technical analysis points to a decline. If any further negative news comes to the market or the earnings development is even worse than the company expects and at the same time the current supports are broken, Pfizer stock could be a very interesting choice for investors looking for a stock to drop or to hedge (hedge) their investments.
Sources:
https://finance.yahoo.com/quote/PFE/
https://investors.pfizer.com/Investors/Financials/Quarterly-Results/default.aspx
https://s28.q4cdn.com/781576035/files/doc_financials/2022/q4/Q4-2022-Earnings-Charts-FINAL.pdf
https://s28.q4cdn.com/781576035/files/doc_financials/2022/q4/Q4-2022-PFE-Earnings-Release.pdf
https://en.wikipedia.org/wiki/Pfizer
https://seekingalpha.com/symbol/PFE/ratings/sell-side-ratings