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  • Earnings
  • disruptive innovation
  • genome editing

Will the Pfizer share price look healthy after earnings?

The Pfizer share price [PFE] gained 15.9% in the year to 26 July to close at $41.02. Over the year’s opening months the Pfizer share price actually fell significantly, bottoming out at $33.49, 9% down for the year, on 26 February.

It has gained steadily since then. A mini-rally took the Pfizer share price to a close of $36.62 on 29 March, before climbing just short of 8 in three weeks to close 21 April at $39.53. Another rapid surge saw the Pfizer share price climb a massive 13.47% in just two days to close 10 June at $40.68. This leaves the Pfizer share price 17.8% higher than its level 12 months ago.

15.9%

Pfizer's YTD share price rise

  

Will the upcoming earnings announcement provide a shot in the arm for the Pfizer share price?

 

An earnings booster

Pfizer is expected to announce earnings for the current quarter, to June 2021, before markets open on 28 July.

Zacks Equity Research analysts’ consensus estimate puts sales at $17.54bn for the quarter, representing a 48.61% increase year-over-year. Earnings per share are expected to rise 24.36% from the equivalent quarter in 2020, to $0.97. CNN Money’s panel yielded the same consensus EPS estimate.

At the high end of Zacks’s estimates, sales could total as much as $18.50bn, a 56.78% increase on the year-ago figure of $11.80bn. Even the low estimate of $16.82bn would see a revenue increase of 42.54% year-over-year.

$18.5billion

Pfizer's estimated sales - a 56.78% YoY rise

  

CNN Money’s analyst panel offers a wider spread of estimates, its low figure of $16.3bn still represents a 38.14% increase year-over-year. Analysts polled by CNN see Pfizer’s sales reaching as high as £23.1bn, more than double their figure a year ago. CNNs consensus sales estimate is also higher than Zacks’s most optimistic estimate.

Zacks’s most conservative earnings estimates still see year-over-year increases of 15.38% to $0.90, while the optimistic picture for Pfizer would be an increase of 29.49% to $1.01. CNNs high once again outstrips Zacks’s estimate by 11 cents, but its low estimate factor no EPS growth for the company at $0.78.

Pfizer’s business performance has been bolstered this past year by one of the most widely-used coronavirus vaccines. Ongoing development and sales of this vaccine and its boosters should uplift Pfizer’s revenue 57.22% for 2021 as a whole, according to Zacks analysts, with earnings also forecast to rise 64.41% compared to 2020.

However, as vaccine rollouts and pandemic recoveries continue, analysts expect this growth to tail off. Zacks forecasts Pfizer’s sales falling 16.23% in 2022, alongside a 9.42% drop in earnings. Should any indications that Pfizer can continue its growth surge beyond the current calendar year appear, expect to see an uptick in the Pfizer share price.

The stock recently enjoyed a boost of its own as a New England Journal of Medicine revealed the Pfizer vaccine was 88% effective against the now globally-dominant Delta variant, provided two shots had been administered. The Pfizer share price fell 0.07% on 21 July, the day the findings were announced, but gained 0.47% in the first thirty minutes of trading on 22 July.

88%

Effectiveness of Pfizer vaccine against the Delta variant

  

Pharma trailing, ARKG sinking

Pfizer is the seventh-largest holding in the SPDR S&P Pharmaceuticals ETF [XPH], which tracks the pharmaceuticals section of the S&P Total Market Index. As of 26 July, Pfizer constituted 4.80% of the fund’s weight.

The fund fell 0.8% in 2021 to 26 July, its fortunes, like the Pfizer share price, highly sensitive to changes in the pandemic recovery outlook. The fund was 7.6% up on 17 February, but was almost as far down (7.5%) on 6 May. Over the past 12 months, the fund gained 17.3%.

Some related funds have prospered during the year, however. The iShares Biotechnology ETF [IBB] has gained 6.4%so far this year (through 26 July), although the fund doesn’t carry Pfizer. Its largest holding as of 21 July is fellow vaccine producer Moderna, with 8.29% of its weight. Moderna significantly outperformed the Pfizer share price in 2021 to 26 July, surging 221.5% during the period.

On the flip side, other funds have had it worse. The ARK Genomic Revolution Fund [ARKG] has fallen just short of 10% so far this year to 26 July. Its top holding, Teladoc Health, weighted 6.73% as of 22 July, fell 23.3% in the period. However, ARKG significantly overperformed both other funds over the longer term, with gains of 57.4% in the 12 months to 26 July.

Disclaimer Past performance is not a reliable indicator of future results.

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