Is Pfizer Stock A Sell After Two Years In Free Fall? Or Will Seagen Bolster Sales?

Pfizer (PFE) stock, which peaked in December 2021, has now fallen for two years as the drugmaker looks for its next big break after developing the first Covid vaccine with Germany’s BioNTech (BNTX).




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Notably, Pfizer wrapped up its $43 billion acquisition of cancer-focused biotech Seagen in December. The deal centered on Seagen’s expertise in antibody drug conjugates, or ADCs, targeted means of sending chemotherapy directly to tumor cells, thus limiting their damage to healthy tissue. The space heated up in 2023 after Pfizer announced its takeover plans.

A day after completing its Seagen buyout, Pfizer announced that the Food and Drug Administration approved a combination of its new drug, Padcev, with Merck‘s (MRK) Keytruda for patients with advanced bladder cancer. Padcev was Seagen’s second-biggest moneymaker. Also last month, the FDA agreed to review another Seagen drug, Tivdak, as a potential treatment for cervical cancer.

Pfizer also declared a 42-cent dividend for the first quarter. This represented Pfizer’s 15th year of consecutive quarterly dividend increases, Chief Executive Albert Bourla said in a written statement.

But on a bearish note, Pfizer issued a disappointing outlook for 2024 amid expected and continuing declines for its Covid vaccine and oral treatment. For the year, the company expects $58.5 billion to $61.5 billion in sales, including Seagen’s contribution. That includes a combined $8 billion from the Covid shot, Comirnaty, and the oral treatment Paxlovid. The guidance missed expectations.

Pfizer also recently submitted its request for approval of a hemophilia A and B treatment in the U.S. and Europe. In Phase 3 testing, that drug reduced annualized bleeding rates by 35% and 92% vs. routine preventive treatments for people with hemophilia A and B, respectively. The company also gained approval in Europe for a new multiple myeloma drug, Elrexfio.

But Pfizer also scrapped development of a twice-daily treatment for obesity, an area where it trails Novo Nordisk (NVO) and Eli Lilly (LLY) distantly.

So, all in all, is PFE stock a buy or a sell right now?

Pfizer Stock Fundamentals: Surprise Profit

For the fourth quarter, Pfizer reported an unexpected profit of 10 cents per share, minus some items. That flipped expectations for an 18-cent loss per share. Earnings tumbled 91% year over year. The profit was due to better-than-expected gross margins and low research and development spending.

Sales also plummeted 41% to $14.25 billion and missed forecasts for $14.37 billion. Excluding the impact of Covid products, vaccine Comirnaty and oral antiviral Paxlovid, sales climbed 8% operationally.

In addition to the expected declines for Comirnaty and Paxlovid, revenue from pneumococcal vaccine Prevnar slipped 8% to $1.61 billion. That widely missed projections. Sales from cancer drugs Ibrance and Xtandi also came in light.

On the flip side, revenue from blood thinner Eliquis and Vyndaqel beat expectations. Vyndaqel treats a condition in which abnormal protein builds up on the heart. Sales climbed 41% to $961 million. Eliquis, which was developed in partnership with Bristol Myers Squibb (BMY), brought in $1.61 billion in sales, up 9%.

For the first quarter, Pfizer stock analysts forecast earnings of 54 cents per share and $14.44 billion in sales. Earnings would dive 56% as sales tumble 21%.

Investors are encouraged to seek stocks with 20%-25% recent sales and earnings growth. Pfizer is not hitting those marks. Big institutional investors — who account for up to 70% of all market trades — usually look for stocks with accelerating earnings and sales growth.

Pharmaceutical Company’s Annual Metrics

Pfizer’s sales have fallen markedly since hitting a record in 2022. Last year, sales tumbled 42% to nearly $58.5 billion. Top sellers included Comirnaty and Paxlovid, which brought in a $11.22 billion and $1.28 billion, though sales tumbled a respective 70% and 93% year over year.

Blood thinner Eliquis generated $6.75 billion in sales, up 4% on a strict, as-reported basis. Prevnar sales inched 2% ahead to $6.44 billion.

But other key products saw downfalls. Revenue from Xeljanz, which treats inflammatory conditions, fell 5% to $1.7 billion. Sales of Enbrel, developed with Amgen (AMGN), toppled 17% to $830 million. Pfizer sells Enbrel outside the U.S. and Canada.

For 2024, Pfizer expects adjusted earnings of $2.05 to $2.25 per share and $58.5 billion to $61.5 billion in sales. At the midpoints, earnings would climb almost 17% as sales rise almost 3%.

Pfizer Stock And Recent News

Pfizer recently gained approval for a combination of Padcev and Keytruda in patients with advanced or metastatic bladder cancer. This is the first combination approved as an alternative to platinum-containing chemotherapy, the current standard of care for previously untreated patients.

The approval is based on a Phase 3 study showing the regimen nearly doubled the median overall survival — how long patients lived before dying of any cause — and progression-free survival. The latter is how long patients lived before their cancer worsened.

Pfizer also wrapped up its takeover of Seagen and guided to $3.1 billion in sales from the company in 2024. That missed expectations, however. Further, Pfizer issued light adjusted earnings guidance for $2.05 to $2.25 per share. That guidance excludes the impact of Seagen’s takeover.

Pfizer is now awaiting decisions in the U.S. and Europe for marstacimab, a potential treatment for hemophilia A and B. Marstacimab is a once-weekly under-the-skin shot, compared with standard intravenous infusions for hemophilia patients. If approved, it would be the first hemophilia drug that uses a flat dose, meaning all patients receive the same amount of drug regardless weight.

Promisingly, the European Commission signed off on Elrexfio for relapsed or refractory — not treatable by other means — multiple myeloma. The drug is now allowed in patients who have had at least three prior treatments and still worsened. The agency also approved Pfizer’s Talzenna on top of Xtandi for patients with castration-resistant prostate cancer that has spread to other organs.

On a bearish note, Pfizer is now well behind Novo and Lilly in obesity treatment. Pfizer dropped a once-daily pill and then twice-a-day pill due to side effects. The company is now working to improve its once-a-day approach for obesity treatment.

Technical Analysis: PFE Stock Hits 50-Day Line

Pfizer stock is trading well below its 200-day moving average and sank back below its 50-day line on Jan. 10, according to MarketSmith.com. It’s important to note that shares are not forming a chart pattern for investors to watch.

(Related: Keep tabs on chart patterns by visiting IBD’s MarketSmith.com.)

Shares of Pfizer have a Composite Rating of 22 out of a best-possible 99. The measure weighs a stock’s key growth metrics against all other stocks. Leading stocks tend to have Composite Ratings of 95 or better, according to IBD Digital.

Pfizer stock has a Relative Strength Rating of 13 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 ranks in the bottom 13% of all stocks in terms of performance over the last year.

The pharmaceutical company’s EPS Rating, a measure of profitability, is 35 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 PFE Stock A Buy Or A Sell?

Based on savvy rules of investing, PFE stock isn’t a buy right now. Pfizer stock still has to prove its fundamental and technical merit. Also, shares aren’t forming a chart pattern with a clear entry for investors, despite recently regaining ground and briefly retaking their 50-day line. Now, shares are below that ceiling.

It will be important to watch how Pfizer stock performs as the company shores up its pipeline and seeks new approvals in its efforts to move beyond the astronomical growth it saw at the height of the pandemic. Though it has a booster Covid shot, like rivals Moderna (MRNA) and Novavax (NVAX), analysts don’t expect sales to climb.

Instead, the Street is closely watching the adult RSV vaccine, which hit the market at the same time as a competitor from GSK (GSK). Pfizer’s efforts now that it owns Seagen could also be key to future growth.

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.

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