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With a market cap of $161.3 billion, New York-based Pfizer Inc. (PFE) is a leading global biopharmaceutical company. Known for its innovative drugs and vaccines, it serves diverse therapeutic areas, including oncology, immunology, rare diseases, and infectious diseases.
Shares of Pfizer have significantly underperformed the broader market over the past 52 weeks. PFE stock has dipped 5.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 41.7%. In 2024, shares of PFE are down 1.2%, compared to SPX's 22.3% gain on a YTD basis.
Looking closer, PFE has also lagged behind the Health Care Select Sector SPDR Fund's (XLV) 20.5% returns over the past 52 weeks and a 8.8% YTD gain.
Pfizer’s underperformance stems from a sharp decline in COVID-19 vaccine and treatment sales, which surged during the pandemic but dropped as demand normalized. Additionally, the company took on significant debt, particularly with the Seagen acquisition, increasing financial strain as interest rates rose and economic conditions tightened.
Moreover, Pfizer's stock dropped 1.4% on Oct. 29 due to concerns over CEO Albert Bourla’s defense of costly acquisitions criticized by activist investor Starboard Value. Although Pfizer beat Q3 estimates with $17.7 billion in revenue and over $6 billion in adjusted net income, Starboard's view that the acquisitions wasted funds dampened investor sentiment. Even though Pfizer raised its 2024 guidance to $61- 64 billion in revenue and $2.75 per share - 2.95 per share in adjusted earnings, the market remained unconvinced about the strategy's potential for long-term profitability.
For the current fiscal year, ending in December, analysts expect PFE's EPS to grow 56.5% year-over-year to $2.88. The company's earnings surprise history is promising. It beat the consensus estimates in all of the last four quarters.
Among the 22 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on nine “Strong Buy” ratings and 13 “Holds.”
This configuration is slightly more bullish than three months ago, with eight “Strong Buy” ratings on the stock.
On Oct. 29, Jefferies analyst Akash Tewari reiterated a “Buy” rating on Pfizer and set a price target of $33. As of writing, PFE is trading below the mean price target of $32.65. The Street-high price target of $45 implies a modest potential upside of 58.1%.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
