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How Far can Comirnaty Drive Pfizer’s Growth?
Stock Analysis & Ideas

How Far can Comirnaty Drive Pfizer’s Growth?

The buzz around pharma-giant Pfizer’s (PFE) COVID-19 vaccine Comirnaty is keeping the company’s shares volatile lately. Any news about the vaccine has been significantly affecting the share prices for the past few weeks, reflecting investors’ varying sentiments about the short- as well as long-term sales potential of Comirnaty.

Yesterday, Mizuho analyst Vamil Divan weighed in on the prospects of Pfizer and maintained a neutral stance on the stock, with a Hold rating and $43 price target. “We believe expectations have softened in recent weeks on the vaccine’s longer-term impact to Pfizer’s sales and earnings,” observed Divan. (See Analysts’ Top Stocks on TipRanks)

Last week, Divan had reduced his expectations on Comirnaty sales for the third quarter of 2021, results of which are expected to be released on November 2. However, he mentioned that his near-term outlook does not impact his longer-term view of the company.

“While quarterly results for a company like Pfizer do not necessarily change our longer-term, fundamental view of the company, we have received many questions on our expectations for 3Q21 sales of their COVID-19 vaccine Comirnaty,” acknowledged Divan, explaining his short-term view cut and long-term optimism.

Particularly, the analyst notes that the influence of various government rules and pricing assumptions make an analysis of Comirnaty sales outside the U.S. (ex-U.S.) much more cumbersome. Moreover, the fiscal quarter for ex-U.S. lags the calendar quarter by one month, i.e., the fiscal third quarter for ex-U.S. performance of the company includes sales only until August 31 (one month is included in June). This creates some difficulty in performing accurate calculations.

Other than that, in the upcoming earnings call, Divan hopes to see management at Pfizer will throw more light upon their developments, pipeline updates, utilization of cash flows generated from the sales of Comirnaty, and long-term guidance. Thus, it remains to be seen what lies ahead for Pfizer, or in particular, the Comirnaty vaccine.

The analyst consensus also maintains a cautious stance on Pfizer, with a Hold rating, based on 2 Buys and 10 Holds. The average Pfizer price target of $45.38 indicates an upside potential of 6.6%.

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Disclosure: At the time of publication, Chandrima Sanyal did not have a position in any of the securities mentioned in this article.

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