Pfizer Stock Outlook 2022
It would be nice to say that the stock market has underperformed year-to-date. The S&P 500 stock index is down almost 14% this year. Worse, the tech-heavy Nasdaq index is down over 22% in 2022. With inflation, rising interest rates and the conflict between Russia and Ukraine, the stock market has some investors looking for shelter. So, you might want to consider the healthcare sector and more specifically, Pfizer stock.
Pfizer (NYSE: PFE) has been a leader in pharmaceuticals for decades. The company has built an extensive portfolio of patented drugs that help patients with a wide array of health issues. For instance, one of Pfizer’s largest drugs is Prevnar, a vaccine that fights against bacterial infections. Another blockbuster for Pfizer is its breast cancer drug, Ibrance.
Readers may have even received a COVID-19 vaccine from Pfizer and partner BioNTech. Pfizer’s COVID-19 vaccine started distribution in late 2020 and continues today. Though the COVID-19 vaccine was a big source of sales for Pfizer, it will likely decrease over time. Remember, COVID-19 is a virus and will be around forever. So, the market for its COVID-19 vaccine may continue for quite some time.
Pfizer’s drugs treat many more health issues, and its portfolio is growing. So, what’s next for Pfizer stock?
Pfizer Stock Earnings
On February 8, Pfizer issued a press release about its fourth-quarter and full-year business results. The press release said that the company’s sales rose by an incredible 92% in 2021. Readers should know that almost all the boost in sales was due to COVID-19 vaccines. Without the COVID-19 vaccines, Pfizer’s sales still rose a respectable 6%.
The company also said it made adjusted earnings per share of $1.08 for the fourth quarter. Industry analysts thought Pfizer would only report $.85 per share. So, Pfizer’s earnings per share came in higher than the analyst thought they would.
Talking about the 2021 results for Pfizer stock, Chairman and CEO Dr. Albert Bourla released a statement. He said, “In the early days of the COVID-19 pandemic, we committed to use all of the resources and expertise we had at our disposal to help protect populations globally against this deadly virus, as well as to offer treatments to help avoid the worst outcomes when infections do occur. We put billions of dollars of capital on the line in pursuit of those goals, not knowing whether those investments would ever pay off. Now, less than two years since we made that commitment, we are proud to say that we have delivered both the first FDA-authorized vaccine against COVID-19 (with our partner, BioNTech) and the first FDA-authorized oral treatment for COVID-19.”
Forecast and Predictions
Pfizer thinks it will have another banner year for its COVID-19 vaccine this year. The company has two versions of the vaccine. Combined, Pfizer believes the two will make sales of about $54 billion in 2022.
In the full-year press release, the company also said that it thinks overall sales for 2022 will be between $98 billion to $102 billion. If sales for 2022 end in the middle of that range, they would have grown 23%. Pfizer believes it will earn $6.35 to $6.55 per share from the sales. Both are big increases from 2021.
What you may find interesting is that industry analysts have more optimistic forecasts for 2022 than Pfizer stock. For the year, analysts think the company will report earnings per share of $7.26.
On May 3, Pfizer’s managers will be hosting a webcast to talk about the company’s first-quarter results. After they discuss the results, the managers will take questions from listeners. Anyone can log onto the webcast. Readers can find a link to the webcast here.
For the first quarter of 2022, industry analysts think the company will report $1.66 in earnings per share. Tune in to see if Pfizer’s earnings per share are higher or lower than estimates.
Is Pfizer Stock a Good Buy?
Though much of investor’s focus may be on Pfizer’s COVID-19 vaccines, there is more to the story. Much of the world is trying to get COVID-19 vaccines for its citizens as quickly as possible. That is good news for Pfizer and its competitors. What happens after that?
Keep in mind that COVID-19 might never go away. Like the flu vaccine, folks may get a new COVID-19 vaccination each year. When Pfizer and other COVID-19 vaccine makers finish the initial vaccination, there may still be periodic yearly vaccinations.
Don’t forget about Pfizer’s other drugs. In addition to the blockbusters mentioned earlier in this article, the company also makes cardiovascular drug Eliquis and immunology drug Xeljanz. The profit from these drugs is enormous.
With billions of dollars in profits from these drugs coming in each year, the company has the scale to invest in new medicines of the future. You may also be intrigued by Pfizer stock’s dividend. The stock has a dividend yield of over 3.25%. In addition, the stock valuation does not look expensive. Based on the company’s earnings per share guidance, the stock trades at a 7.6x forward P/E ratio.
About BJ Cook
BJ Cook is a long-time stock nerd. He has held several roles in the equity research world and earned the right to use the CFA designation in 2014. When he’s not writing for Investment U, you can find him searching for new investment ideas. Outside the investment community, BJ is a die-hard Cubs fan.