Pfizer stock may be the latest contender for your watchlist as shares set up to score a breakout from a new buy point. The pharmaceutical company is also awaiting authorization of its second Covid booster shot from the Food and Drug Administration, a decision that could impact Pfizer shares.
Pfizer, the largest pharmaceutical company in the world by annual revenue, is Monday's IBD 50 Stocks To Watch pick. New York-based Pfizer is forming the handle of a cup-with-handle base over the past week.
The handle creates a 55.40 buy point, according to MarketSmith pattern recognition. Pfizer stock has pulled back in light volume to form the handle, which is exactly the kind of action investors want to see.
The stock retook its 50-day moving average on March 14. Shares are also well above their 200-day line. Pfizer stock has been forming the base since the end of December. But since hitting a low of just under 46 in late February, the stock has rallied back, with gains of nearly 14% this month.
Shares now remain around 4% away from the proper entry.
Pfizer Stock Among Top Drugmakers To Watch
Notably, Pfizer delivered the first FDA-authorized vaccine against Covid-19, with partner BioNTech, and the first FDA-authorized oral treatment for Covid-19.
The company is now pushing to get authorization for its second Covid booster shot, which would be the fourth dose for Americans age 65 and older. Meanwhile, the company is aiming to launch its Covid vaccine for children under the age of 5 in May.
The company's recent reports show strong growth in the top line and bottom line. In the fourth quarter, Pfizer's earnings were $1.07 per share on $23.8 billion in sales, according to MarketSmith chart analysis. Earnings skyrocketed 143% on a year-over-year basis while sales surged 105%. This represented a fifth straight quarter of accelerating EPS growth.
While Pfizer beat analysts' profits estimates, its sales missed expectations.
Pfizer Individual-Product Revenues Varied In Q4
As for the performance of individual drugs during the fourth quarter, some of Pfizer's heavy hitters increased in sales year over year, while others faltered.
Revenue from Pfizer's blood thinner Xeljanz beat projections at $1.5 billion, up 19%. Sales of Xeljanz, a treatment for inflammatory conditions, and a heart-disease drug, Vyndamax, also came in above expectations at $721 million and $561 million, respectively.
But Pfizer's biggest cancer drug, Ibrance, saw revenue fall 3% to $1.39 billion. Sales from Prevnar, a pneumonia vaccine, also lagged at $1.3 billion. Excluding the impact of Covid products, overall Pfizer sales fell 2%.
Pfizer stock carries a three-year annual growth rate of only 4%, which falls below the minimum for CAN SLIM stocks. But with its recent Covid-19 vaccine-fueled sales growth, the stock has reported multiple quarters of growth above 25%. Therefore, Pfizer still qualifies as a CAN SLIM stock when assessed on a quarterly basis.
Analysts estimate earnings to climb 65% in 2022. But they forecast a drop in 2023 of 27%.
