Pfizer Is Under Pressure Today, Here Is Why

Key Insights

• Reuters reported that demand for Paxlovid lagged estimates. 
• Pfizer’s coronavirus drug was expected to boost the company’s financial performance. 
• Earnings estimates have started to move lower, which is bearish for Pfizer shares. 

Pfizer Stock Falls As Report Indicates That Demand For Paxlovid Is Weaker Than Expected

Shares of Pfizer gained downside momentum after a Reuters report indicated that demand for the company’s antiviral drug Paxlovid was lower than previously expected.

The report noted that factors like reduced testing and the spread of Omicron, which is believed to be less severe than Delta, contributed to the decline in demand for Paxlovid.

Previously, markets thought that Paxlovid would be a material contributor to Pfizer’s bottom line. However, it looks that analysts will have to adjust their forecasts after the new report. Not surprisingly, Pfizer shares found themselves under pressure after the Reuters report was released.

What’s Next For Pfizer Stock?

Analysts expect that Pfizer will report earnings of $7.23 per share in the current year and earnings of $5.69 per share in the next year, so the stock is trading at 9 forward P/E.

It should be noted that analyst estimates have started to move lower in recent weeks as analysts began to adjust their demand forcasts for coronavirus vaccines and treatments.

While Pfizer stock looks cheap at current valuation levels, it remains to be seen whether speculative traders will rush to buy the stock in the current situation.

Earnings are expected to decline, and earnings estimates may move even lower in case sales of Paxlovid are weak as the Reuters report suggests.

If analyst estimates continue to move lower in the upcoming weeks, Pfizer stock could find itself under more pressure and move closer to yearly lows near the $45.50 level.

For a look at all of today’s economic events, check out our economic calendar.