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Pfizer Stock: What’s Next for Vaccine Producer?
Stock Analysis & Ideas

Pfizer Stock: What’s Next for Vaccine Producer?

I am bullish on Pfizer (PFE), as its strong underlying business model and attractive valuation make it look attractive.

Pfizer is a premier multinational biopharmaceutical company that is involved in the business of discovering innovative solutions to some of the most complex and challenging health problems of the day.

The company has been working for over 150 years to help make a difference in the lives of the world’s citizens. (See Pfizer stock charts on TipRanks)

Strengths

Pfizer’s most recent financial highlights show the underlying strength of the business, and indicate consistent growth from a number of products and segments.

Pfizer’s COVID-19 vaccine (BNT162b2) has been distributed globally in an attempt to scale up the efforts for combating the COVID-19 pandemic.

The company reported that over 1 billion doses of the vaccine have been delivered across the world. The vaccine contributed to $7.8 billion in direct sales and alliance revenues for the second quarter of 2021.

Aside from the growth from the vaccine, it is important to note that the company also saw a 10% year-over-year operational revenue growth rate for the rest of the business.

Recent Results

Pfizer’s second-quarter results beat Wall Street estimates on both earnings and revenues. The company’s report for the second quarter showed revenue of $19 billion — an increase of 92% — compared with analysts’ estimates of $18.7 billion.

Adjusted earnings per share were $1.07, as compared with the expected $0.97 per share.

The company also announced that it was raising its Fiscal Year 2021 guidance to reflect the higher expected revenues from all of its business segments.

Revenue is now expected to be in the range of $78 billion to $80 billion, as compared with the previous expectation of $70.5 billion to $72.5 billion. This includes the $33.5 billion in revenue expected from the COVID-19 vaccine supplied this year.

Valuation Metrics

Pfizer’s stock looks pretty attractively valued right now, as its EV/EBITDA ratio and P/E ratio both indicate that the stock is trading at a discount to its historical range.

Its forward EV/EBITDA ratio is currently 8.8x, and its forward P/E ratio is currently 9.7x.

Wall Street’s Take

From Wall Street analysts, Pfizer earns a Hold analyst consensus, based on two Buy ratings, and nine Hold ratings assigned in the past three months.

The average Pfizer price target of $45.55 puts the upside potential at 8.8%.

Summary and Conclusions

Pfizer is a strong company that has a lot going for it right now.

That said, Wall Street analysts are pretty neutral on the stock after its strong performance in recent months.

However, compared to its historical valuation multiples, the stock still looks attractively priced.

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

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