Is Pfizer Stock a Buy as COVID Pills Gear Up for Approval?

By Kirsteen Mackay

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Pfizer's COVID-19 pill, vaccine and CFO resignation are making headlines this week. Does the news help boost its investment thesis?

Pfizer makes the headlines again

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The Pfizer (NYSE: PFE) share price is up 34% year-to-date. It enjoyed a steady run up from March to August then fell back until mid-October. It's now retracing its August high with several positive headlines helping boost investor confidence.

Pfizer share price year-to-date

Pfizer's COVID-19 busting efforts still in focus 

The FDA is expected to authorize Pfizer's COVID vaccine booster for adults later this week.

In other Pfizer vaccine news, it recently won the US authorization for its COVID-19 shot in children aged 5-11. This is a lower-dose vaccine, one-third the dosage that older children and adults receive.

Furthermore, Pfizer's COVID-19 pill reportedly reduces the risk of hospitalization and death by 89%, according to the results of a key study. That's a very impressive feat, leading the Biden administration to request emergency-use authorization for the pill from the FDA. The administration also plans to buy enough of the new pill to treat 10 million patients.

Moreover, Pfizer plans to allow other companies to make generic versions of its COVID pill for the world's poorer countries. The manufacture and delivery of pills is easier and cheaper than that of the vaccines. It can also be self-administered, further reducing the costs associated with distribution.

Pfizer will not profit from this agreement, but the display of goodwill should help the world get a handle on the pandemic and potentially improve Pfizer's image.

Unfortunately, medical charity Doctors Without Borders (MSF) has criticized the deal saying restrictive voluntary licenses were no substitute for guaranteed global access to COVID-19 tools to bring the pandemic under control. Amnesty International also criticized the pharma giant, saying it continues to supply the majority of its COVID-19 vaccines to wealthy nations.

Patrick Wilcken, Amnesty International's Head of Business and Human Rights, said:

“We’re still in the middle of an unprecedented global health and human rights crisis and it is essential that all countries of the world have access to vaccines as soon as possible. Pfizer says it is committed to supplying doses to low and middle-income countries, but the numbers just don’t bear this out. The fact is that this company is still putting profits first,”

BMJ whistle-blower scandal

Maintaining a positive image is not easy nowadays, with so much political division and polarizing opinions online.

Earlier this month, the British Medical Journal (BMJ) published a Pfizer expose as a researcher turned whistle-blower revealed the data integrity and regulatory oversight of global vaccine production to be questionable. 

Brook Jackson, a regional director who was employed at the research organization Ventavia Research Group told The BMJ that the company falsified data, unblinded patients, employed inadequately trained vaccinators, and was slow to follow up on adverse events reported in Pfizer's pivotal phase III trial. 

While this complaint does not appear to have given investors cause to worry, it is something Pfizer shareholders should be aware of.

Pfizer CFO resigns

In other Pfizer news, its CFO Frank D'Amelio is getting set to retire. D'Amelio has been with the company for over 15 years and has seen it generate close to $150bn in market cap growth.

PFE Q3 earnings

Pfizer's recent Q3 earnings results beat analysts' estimates on revenues and earnings per share (EPS). It recorded 130% operational revenue growth year-over-year and raised 2021 total company guidance for both revenues and adjusted EPS.

EPS of $1.34 beat consensus estimates of $1.08 by 24%. And sales climbed 134% to $24bn. 

The company also delivered its 331st consecutive quarterly dividend. Pfizer's dividend yield currently sits at 3.1% against a market cap of $281bn. Meanwhile, its price-to-earnings ratio is 14.

So, is Pfizer stock a buy? The PFE share price does not seem overly expensive, but investor sentiment around big pharma stocks is less bullish than it was a year ago. FactSet analyst consensus currently rates it a Hold with a target price of around $47.

For further information on Pfizer and investing in healthcare stocks in general, get our FREE healthcare report.

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Topics:
Covid-19
Healthcare Providers and Services
Pharmaceuticals
Industries:
Healthcare
Companies:
Pfizer

Author: Kirsteen Mackay

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Kirsteen Mackay does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above article.

Kirsteen Mackay has not been paid to produce this piece by the company or companies mentioned above.

Digitonic Ltd, the owner of ValueTheMarkets.com, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of ValueTheMarkets.com, has not been paid for the production of this piece by the company or companies mentioned above.