Barrons: Pfizer Stock Is Falling. Did Investors Misunderstand the Revenue Guidance?


Barrons:

Pfizer shares dropped sharply after the company’s 2022 sales guidance appeared to fall short of expectations.

The guidance that Pfizer (ticker: PFE) presented, however, doesn’t take into account future sales of Pfizer’s Covid-19 vaccine and antiviral, but only sales already made. The number will likely climb upward as the year progresses, suggesting that the selloff on Tuesday may have been based on a misunderstanding.

In its earnings release, Pfizer said it expected revenues of between $98 billion and $102 billion in 2022, including Covid vaccine sales of $32 billion and Covid antiviral sales of $22 billion.

The antiviral sales guidance met the consensus estimate according to FactSet, but the Covid vaccine guidance fell short by $2.8 billion. The FactSet estimate for Pfizer’s overall revenue for 2022 was $103.2 billion, around $3 billion above the midpoint of Pfizer’s guidance range.

Questions:

  • Do you think Pfizer is undervalued right now due to incorrect interpretation of future vaccine and anti-viral drug sale projections?

  • More a more general level, do you think Pfizer is going to wisely invest its covid windfall and develop great revenue streams?

  • Do you consider Pfizer a great buy or not? Is this a long term hold? The pe ratio is 13. Is that considered normal for drug companies?


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