The Food and Drug Administration approved Pfizer (PFE) and BioNTech‘s (BNTX) Covid vaccine in late August, sending Pfizer stock into a profit-taking zone.
X
But the companies just began submitting data to the FDA in the hopes of securing full approval for their booster shot — and Pfizer stock fell. Still, the White House’s Covid task force has said it plans to allow booster shots for recipients of the Pfizer/BioNTech and Moderna (MRNA) vaccines to begin Sept. 20. The third shot will follow eight months after the second.
Meanwhile, the FDA says it’s still collecting data from Johnson & Johnson (JNJ) to determine whether recipients of that one-dose shot will need a booster dose.
On the same day Pfizer won full approval for its BioNTech-partnered Covid shot — now known as Comirnaty — the company said it would buy biotech Trillium Therapeutics (TRIL) for $2.26 billion. Trillium is working on immuno-oncology treatments.
Pfizer also recently topped second-quarter expectations and boosted its full-year outlook.
So, all in all, is Pfizer stock a buy?
Pfizer Stock Fundamentals: Earnings Strong
In the second quarter, adjusted Pfizer earnings were $1.07 per share, soaring 73% year over year. Sales rocketed 92% to $18.98 billion. Both measures beat forecasts.
The company’s Covid vaccine brought in $7.8 billion in sales.
Revenue from blood thinner Eliquis, breast cancer drug Ibrance and pneumonia vaccine each beat second-quarter expectations. Less bullishly for Pfizer stock, sales of inflammation drug Xeljanz declined due to ongoing safety concerns.
On a segment basis, sales of rare disease treatments posted the best growth — rising 32%. Sales of drugs called Vyndaqel/Vyndamax soared 81% to $501 million.
Overall, total second-quarter growth lined up with CAN SLIM rules for investing. Investors are encouraged to seek stocks with 20%-25% recent sales and earnings growth.
Big institutional investors — who account for up to 70% of all market trades — usually look for stocks with accelerating earnings and sales growth.
That trend is expected to continue in the third quarter. Analysts polled by FactSet call for adjusted income of $1.08 a share and $22.48 billion in sales, up a respective 50% and 85%.
Pharmaceutical Company’s Annual Metrics
Pfizer’s sales popped 2% last year to $41.91 billion. That excluded the Upjohn unit, which Pfizer merged with Mylan to create Viatris (VTRS). The Upjohn business housed Pfizer’s older drugs, including those facing generic competition.
That growth still lagged Pfizer’s last year of strong gains in 2010. Then, sales jumped 34%.
Top sellers in 2020 included Ibrance, which generated $5.39 billion in sales, up 9%. Sales of blood thinner Eliquis popped 17% to $4.95 billion. But revenue from Prevnar 13 was flat at $5.85 billion.
Xeljanz, which is facing scrutiny for a recent post-marketing study, generated $2.44 billion, rising 9%. Vyndaqel and Vyndamax, which treat a condition that can cause heart failure, brought in $1.29 billion.
For 2021, analysts surveyed by FactSet call for Pfizer to earn $4.04 a share, minus some items, up about 82%. Sales are expected to pop about 87% to $78.41 billion.
In the second quarter, Pfizer raised its full-year outlook to $78 billion to $80 billion in sales and adjusted earnings of $3.95-$4.05 a share. The revenue guidance includes $33.5 billion in Covid vaccine sales.
Pfizer Stock And Coronavirus Vaccine News
Pfizer stock jumped on Aug. 23 after the FDA fully approved its BioNTech-partnered Covid shot for people ages 16 and up. The full approval will allow the vaccine to stay on the market after the pandemic ends. The companies can also change the price and market directly to consumers. The vaccine is also available under an emergency authorization for teens ages 12-15.
The companies are also asking for full approval of their booster shot. Under a White House plan, the booster shots will begin Sept. 20 for all recipients of the messenger RNA vaccines. Previously, the FDA and CDC agreed to allow boosters only for some immunocompromised people. The new plan still needs the FDA and CDC to sign off.
As part of the full approval for people ages 16 and up, Pfizer and BioNTech will be required to run testing to determine the prevalence of side effects known as myocarditis and pericarditis — inflammation of the heart and tissues surrounding it. They occur most frequently in young men.
Pfizer stock fell in late June after the Centers for Disease Control and Prevention noted there’s a link between the Pfizer/BioNTech and Moderna vaccines and the inflammation. The European Medicines Agency also warned against the condition in mid-July.
Pfizer has said it had inked contracts for roughly 2.1 billion doses of its coronavirus vaccine in 2021. On Aug. 9, BioNTech said it expects to hit a manufacturing capacity of 3 billion this year, and to reach 4 billion in 2022.
New tests indicate the vaccine is 84% effective against Covid at six months. But it’s still highly protective against hospitalizations and deaths.
Pfizer confirmed to Investor’s Business Daily on Aug. 23 that testing in children ages 6 months to 11 years old is still ongoing. Data in children ages 5-11 is expected in September, with the 2-5 age group expected to follow “shortly after.” Then, the company will ask for pediatric authorization.
Technical Analysis: PFE Stock Enters A New Zone
Pfizer stock topped a cup-with-handle base with a buy point at 41.19 on July 20. Shares were in a profit-taking zone on Aug. 23, which is 20%-25% above a buy point. But on Aug. 24-25, shares fell below that point.
Still, Pfizer stock remains well above its 50-day line and 200-day moving average, according to MarketSmith.com.
But Pfizer stock may be exhibiting climax-run behavior, meaning it could soon reach a top.
(Related: Keep tabs on chart patterns by visiting IBD’s MarketSmith.com.)
Shares of Pfizer have a perfect Composite Rating of 99. The measure weighs a stock’s key growth metrics against all other stocks. Leading stocks tend to have CRs of 95 or better, according to IBD Digital.
Pfizer stock also has a Relative Strength Rating of 85 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 tops 85% of all stocks in terms of performance.
The pharmaceutical company’s EPS Rating, a measure of profitability, is a 72 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 Pfizer Stock A Buy Right Now?
Based on CAN SLIM rules of investing, Pfizer stock isn’t a buy right now. Shares are well beyond their buy zone, which runs from 41.19-43.25. It’s best to buy a stock once it tops a buy point and is within the 5% chase zone.
The company is expected to report bullish growth in the third quarter, putting it in line with CAN SLIM advice. But that follows a poor year-earlier comparison at the height of the pandemic.
It is important to keep tabs on how Pfizer stock performs as it develops a coronavirus vaccine with BioNTech. Results appear promising so far, but it will be important to see how the company deals with the growing prevalence of the delta variant.
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.
YOU MAY ALSO LIKE:
Biotech Stocks To Watch And Pharma Industry News
Want To Get Quick Profits And Avoid Big Losses? Try SwingTrader
IBD Stock Of The Day: See How To Find, Track And Buy The Best Stocks
Watch IBD’s Investing Strategies Show For Actionable Market Insights
Best Growth Stocks To Buy And Watch: See Updates To IBD Stock Lists
