Nucor earnings beat by $0.08, revenue fell short of estimates
On Tuesday, UBS analyst Colin Bristow revised the price target for Pfizer (NYSE:PFE) shares, reducing it to $24.00 from the previous $28.00, while maintaining a Neutral rating on the stock. Currently trading at $22.38, Pfizer's stock is near its 52-week low of $21.75, with InvestingPro analysis suggesting the stock is undervalued based on its Fair Value calculation. The stock maintains a healthy 7.6% dividend yield, having maintained dividend payments for 55 consecutive years. Bristow's update followed a recent call with Pfizer management, during which they detailed the expected impact of the Inflation Reduction Act (IRA) on their portfolio, particularly in relation to Medicare Part D redesign.
Pfizer has indicated that the effects of the IRA will be felt as each drug progresses through the different levels of Part D coverage, with a more significant impact in the first half of the year. This is due to higher-priced drugs like Ibrance, Xtandi, Vyndaquel, and Xeljanz reaching the catastrophic coverage stage after the first or second prescription. Conversely, lower-priced products such as Abrysvo, Eliquis, Nurtec, and Paxlovid are expected to benefit since they are no longer subject to the coverage gap, commonly known as the "donut hole," payments.
The UBS analyst also pointed out that consensus estimates for first quarter sales of two of Pfizer's products, Paxlovid and Comirnaty, might be overly optimistic. UBS estimates sales of Paxlovid at $566 million compared to a consensus of $1.60 billion, and Comirnaty at $295 million versus the consensus of $380 million. Bristow suggests that Iqvia prescription data is a reliable method to track these sales figures. Additionally, weaker-than-anticipated total prescription (TRx) numbers for Abrysvo were noted, with UBS estimating $116 million in sales against a consensus of $135 million.
Despite the downward adjustment in sales and EPS forecasts, which are 4.8% and 5.6% below consensus respectively, UBS acknowledges the potential positive impact of upcoming data on danuglipron. With Pfizer's next earnings report scheduled for April 29, InvestingPro subscribers can access comprehensive earnings previews and real-time analysis of the company's financial health, which currently shows a GOOD overall rating. If favorable results are released concurrently with first-quarter results, and if danuglipron advances into a large Phase 3 obesity program with a competitive profile, it could offset the impact of a weaker quarter.
In conclusion, while UBS recognizes these potential developments, the firm maintains its Neutral stance on Pfizer stock. The analyst emphasizes the need for a stable tail from the COVID business, continued growth in key assets like Nurtec and Antibody-Drug Conjugates (ADCs), and successful execution of the pipeline before adopting a more positive outlook on the company. With current revenue of $63.63B and a P/E ratio of 16.06, investors seeking deeper insights can access Pfizer's complete financial analysis and 13 additional ProTips through InvestingPro's comprehensive research reports.
In other recent news, Pfizer has faced a downgrade from Goldman Sachs, with the investment firm lowering its stock rating from Buy to Neutral and reducing the price target from $32 to $25. The decision reflects a cautious outlook on Pfizer's near-term prospects, particularly concerning its revenue expectations related to the pandemic. Additionally, Institutional Shareholder Services has advised Pfizer investors to reject a proposal concerning executive compensation, citing concerns over modifications that increase the CEO's long-term awards. Furthermore, a report by Bernstein highlights Pfizer as one of the companies at high risk from tariff implications due to its substantial US revenue and imports. The analysis suggests that companies like Pfizer might need to adjust their strategies in response to these potential tariff challenges. Meanwhile, Moderna (NASDAQ:MRNA)'s shares experienced a decline following the resignation of Dr. Peter Marks from the FDA, a move that could impact vaccine developers, including Pfizer, due to the uncertainty in vaccine regulation. Lastly, several drugmakers are reportedly expediting shipments of medicines to the United States in anticipation of potential new tariffs, a precautionary measure to avoid disruptions in supply.
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