Does the stock offer an attractive buying opportunity following the recent news that their COVID-19 vaccine is 90% successful and it is expected to be approved by the FDA?

Company background

Headquartered in New York City, Pfizer, Inc. (PFE) is an American multinational corporation and one of the largest pharmaceutical companies in the world. In fact, the company is currently the 4th largest pharmaceutical company in the world by revenue.  The company is involved in developing and producing vaccines for a range of medical disciplines, such as oncology, immunology, cardiology, endocrinology and neurology.

Pfizer’s products include the blockbuster drug Lipitor, used for lowering blood cholesterol, Lyrica for fibromyalgia and neuropathic pain, Difluca used for an oral antifungal medication, as well as Viagra for erectile dysfunction and Celebrex (anti-inflammatory drug) and others.

With its eight blockbusters in the portfolio, the New York-based company has seen great success in the pharmaceutical business and has kept on growing and developing more game-changing products that are expected to continue driving their sales and profits higher in the future, thus making more money for its shareholders.

Pfizer’s financial performance

By looking at the company’s financial statements, we should say the leading pharmaceutical company has shown a great performance over the past 5 years.
Pfizer has kept on investing in the research and development of new products in order to keep improving the healthcare industry. The company has shown a reasonable sales increase over that period of time. However, by looking at the net profits of the company between 2015 and 2019 we should say that Pfizer has managed to almost triple its net profit figure in less than 5 years. In other words, the company reported a net profit of $6.96 billion in 2015 to reach the $16.27 billion in 2019. The company has managed to keep its return on equity very high at 25-26% so far in 2020 even during the coronavirus pandemic and the healthcare crisis that followed. The return on assets (RoA) figure is also at 10%. Pfizer has also managed to keep its net profit margins pretty high – 31% in early 2020, followed by a slight decrease to 28.8% in the 2nd quarter and 18% in the 3rd quarter, which is still a very solid figure taking into account the economic slowdown that we have seen so far in 2020.

The company’s P/E (price to earnings) is only 12.5x at the moment, while the price to book ratio is only 3.13x, meaning the stock is still cheap and could be offering a huge bullish potential in the next few weeks and months.

Pfizer delivered its 3rd quarter financial results on the 27th of October. The earnings per share (EPS) expectations were for $0.70. However, the company managed to not only beat analysts’ expectations and delivered $0.72 per share but also showed a very decent growth compared to the last quarter of 2019 when the EPS figure was $0.55. In fact, the company delivered great EPS figures in the Q1 ($0.80), followed by the Q2 ($0.78) as well, showing the market that it has performed very well even during the global health crisis caused by the coronavirus pandemic.

Game changer: Pfizer and BioNTech announced that their vaccine candidate against COVID-19 has achieved success in their first interim analysis from the Phase 3 study

November 9th 2020 was an incredible day for science and humanity. The news update showed that Pfizer as well as their German partner BioNTech have announced that their vaccine against COVID-19 has been found to be more than 90% effective in preventing the virus.

You must log in to read the rest of this article.

Now you get 1 month free trial

Add a comment