Pfizer COVID Sales Outlook Disappoints
Dow component Pfizer Inc. (PFE) is trading lower by 4% in Tuesday’s pre-market session after beating Q4 2021 profit estimates and issuing downside fiscal year 2022 guidance. The company posted a profit of $1.08 per-share, $0.21 better than expectations, while revenue missed the mark despite a 104.0% year-over-year increase to $23.84 billion. Traders hit the exits after the guidance warning, which slashed 2% off revenue and 5% off earnings-per-share (EPS).
Disappointing 2022 Sales Outlook
2022 revenue guidance for Comirnaty (COVID vaccine) and Paxlovid (COVID anti-viral) was disappointing, likely triggering the next leg of an intermediate downtrend that just failed a two-week test at 50-day moving average resistance. Comirnaty is now expected to earn $32 billion including recent contracts, while Paxlovid books $22 billion that also includes sales signed or committed as of late January 2022.
Pfizer has other drugs in the pipeline but COVID compounds have moved the stock since the second quarter of 2020. Sadly for shareholders, the vaccine may not achieve the profitability projected by analysts, due to intense political pressure on pricing. In addition, jab uptake declines steadily after the first dose and in younger demographics. Expect greater resistance when officials push fourth doses while, on the flip side, demand for the anti-viral pill could grow exponentially.
Wall Street and Technical Outlook
Wall Street consensus stands at an ‘Overweight’ rating based upon 11 ‘Buy’, 0 ‘Overweight’, 12 ‘Hold’, 1 ‘Underweight’, and 0 ‘Sell’ recommendations. Price targets currently range from a low of $49 to a Street-high $76 while the stock is set to open Tuesday’s session about $3 above the low target. This poor placement highlights growing confusion about long-term earnings potential for Pfizer and rival Moderna Corp. (MRNA) vax plays.
Pfizer rallied above the 1999 high in the 40s in August 2021, completing a massive cup and handle breakout. It hit an all-time high at 61.71 in December and rolled over, entering an intermediate decline that reversed at breakout support in January, The subsequent bounce to 50-day moving average resistance has now failed, generating a test of the low that could yield a breakdown into the 200-day moving average in the upper 40s.In turn, that level could mark a low-risk long-term buying opportunity.
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Disclosure: the author held no positions in aforementioned securities at the time of publication.