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Is Pfizer a Favorite, Following FDA Full Approval?
Stock Analysis & Ideas

Is Pfizer a Favorite, Following FDA Full Approval?

Pfizer (PFE), a pharmaceutical behemoth, is one of those biotech names that has received little public notice.

Pfizer’s stock has risen only 19.4% since December 11, when the vaccine received its first emergency use authorization (EUA) from the FDA, whereas BioNTech (BNTX) shares have risen 184.2% in the same time period.

In such a scenario, a significant regulatory approval from the FDA for the COVID-19 vaccine might help Pfizer win the hearts of investors. Based on the recent full approval, Pfizer’s merger strategy, and its strong pipeline, I am bullish on the stock.

What Happened?

On August 23, Pfizer’s COVID-19 vaccine – COMIRNATY – developed in conjunction with BioNTech, received its first full U.S. approval from the Food and Drug Administration (FDA). The vaccine is recommended for people aged 16 and up.

Markedly, the COVID-19 vaccination for children aged 12 to 15 years is still under emergency use authorization (EUA), and Pfizer is gathering more supporting evidence to have it approved.

BioNTech CEO Ugur Sahin said, “Today’s full approval by the FDA underlines the vaccine’s high efficacy and favorable safety profile.”

He further added, “Our companies have shipped more than one billion doses worldwide, and we will continue to work tirelessly to broaden the access to our vaccine and to be prepared for potential emerging escape variants.”

Probable Impact on Pfizer’s Growth

Given that the threat of a pandemic is still present due to the rapid spread of the extremely infectious Delta strain of coronavirus, the FDA’s final approval of the COVID-19 vaccine should provide Pfizer with a financially significant and consistent revenue stream in the coming days.

The complete FDA clearance is expected to boost public support for vaccine mandates. In addition, unvaccinated people may be more likely to seek immunizations.

Some health experts have speculated that Pfizer/BioNTech may now increase the price of its vaccinations. It has already done so in Europe.

As a result, Pfizer’s COVID-19 vaccines should continue to generate revenue beyond 2021.

This money can be used to fund mergers and acquisitions, as well as invest in R&D, to speed up the development of additional drugs still in the pipeline.

Other Notable Announcements

Pfizer makes money through developing, manufacturing, and selling a wide range of biopharmaceutical products around the world. Markedly, oncology drugs account for a significant portion of the company’s sales.

To further enhance its oncology division, Pfizer agreed to acquire a Canadian drug developer, Trillium Therapeutics, for $2.26 billion on August 23.

In response to the news, Morgan Stanley analyst Matthew Harrison reiterated a Hold rating and a price target of $45.00. This implies 7% downside potential to current levels.

Fundamental Analysis Paints a Rosy Picture

Pfizer’s future prospects appear bright, thanks to a strong pipeline and positive TipRanks measures such as News Sentiment, financial Bloggers, and Hedge Fund managers.

The stock’s TipRanks SmartScore, which comprises 8 unique data sets, indicates that the stock has strong potential to outperform market expectations. Furthermore, TipRanks data shows that financial blogger opinions are 97% Bullish, compared to a sector average of 71%. Also, hedge funds reflected on TipRanks increased their holdings by a cumulative 1.5 million shares during the last quarter.

Wall Street’s Take on Pfizer

The Wall Street community is cautiously optimistic about the stock, with a Moderate Buy consensus rating, based on 3 Buys and 8 Holds.

As for price targets, the average Pfizer price target is $46.40 per share, implying around 4.1% downside potential from current levels.

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

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of Tipranks or its affiliates, and should be considered for informational purposes only. Tipranks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. Tipranks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by Tipranks or its affiliates. Past performance is not indicative of future results, prices or performance.

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