Should You Buy, Sell or Hold Pfizer Stock Before Q3 Earnings?

Pfizer PFE will report its third-quarter 2024 earnings on Oct. 29, before market open. The Zacks Consensus Estimate for sales and earnings is pegged at $15.19 billion and 64 cents per share, respectively. Pfizer’s 2024 earnings estimates have risen from $2.62 to $2.66 per share over the past 30 days. For 2025, earnings estimates have been stable at $2.85 per share over the same timeframe.PFE Estimate MovementImage Source: Zacks Investment ResearchPFE’s Earnings Surprise HistoryThe healthcare bellwether’s performance has been solid, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 69.82%, on average. In the last reported quarter, the company delivered an earnings surprise of 33.3%, as seen in the chart below.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Image Source: Zacks Investment ResearchWhat Does Our Model Say?Pfizer has an Earnings ESP of +2.68% and a Zacks Rank #3 (Hold), suggesting a likely earnings beat. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1, #2 (Buy) or #3 have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Factors Shaping PFE’s Upcoming ResultsSales of Pfizer’s COVID products, Comirnaty and Paxlovid, are expected to have declined due to lower demand.Pfizer records direct sales and alliance revenues from its partner, BioNTech for the COVID-19 vaccine, Comirnaty, and product revenues from its oral antiviral pill for COVID, Paxlovid.The Zacks Consensus Estimate for direct sales and alliance revenues from Comirnaty is $1.03 billion, while that for Paxlovid is $1.3 billion.Our estimate for direct sales and alliance revenues from Comirnaty is $1.13 billion, while that for Paxlovid is $715.4 million.Though COVID revenues are declining, Pfizer’s non-COVID operational revenues improved in the first half of 2024, driven by its key in-line products like Prevnar, Vyndaqel and Eliquis, new launches like Abrysvo, Velsipity, Penbraya, newly acquired products like Nurtec as well as those acquired from Seagen (December 2023). The trend is expected to have continued in the third quarter.The Zacks Consensus Estimate as well as our model estimate for sales of the Prevnar family of vaccines is $1.8 billion.The Zacks Consensus Estimate for sales of Vyndaqel/Vyndamax is $1.41 billion while our model estimates the same to be $1.38 billion.In addition, alliance revenues and direct sales from Eliquis are likely to have provided top-line support. The Zacks Consensus Estimate for alliance revenues from Eliquis is $1.54 billion, while our model estimate is $1.53 billion.The acquisition of Seagen closed in mid-December 2023. The acquisition added our antibody-drug conjugates or ADCs — Adcetris, Padcev, Tukysa and Tivdak — to Pfizer’s cancer portfolio. These drugs likely boosted Pfizer’s oncology sales in the third quarter. Pfizer is particularly witnessing strong demand for Padcev.In the Oncology unit, sales of key medicine, Ibrance are likely to have been hurt due to lower demand trends globally due to competitive pressure. In the Specialty Care unit, sales of Xeljanz and Enbrel are likely to have declined.Investors will be keen to know the sales numbers of Pfizer’s several newly launched drugs like RSV vaccine Abrysvo, Velsipity pill for ulcerative colitis, pentavalent meningococcal vaccine Penbraya and one-time gene therapy Beqvez (fidanacogene elaparvovec) for hemophilia B.The Zacks Consensus Estimate for sales of Abrysvo is $200 million, while our model estimate is $280 million.Nonetheless, a single quarter’s results are not so important for long-term investors. Let us delve deeper to understand whether to buy, sell or hold Pfizer stock.PFE’s Price Performance & ValuationIn the past six months, Pfizer’s stock has risen 9.8% compared with an increase of 7.8% for the industry. The stock has also outperformed the sector while underperforming the S&P 500, as seen in the chart below.Pfizer Stock PerformanceImage Source: Zacks Investment ResearchFrom a valuation standpoint, Pfizer appears attractive relative to the industry and is trading below its 5-year mean. Going by the price/earnings ratio, the shares currently trade at 10.21 forward earnings, lower than 18.83 for the industry and the stock’s 5-year mean of 11.37. The stock is also much cheaper than several other large drugmakers like Eli Lilly LLY, Novo Nordisk NVO, AstraZeneca AZN, AbbVie and others.PFE Stock ValuationImage Source: Zacks Investment ResearchInvestment ThesisAfter a couple of tough years, it seems that Pfizer’s worst slowdown is over now, and the company is gradually making a comeback.Last year was a record year for Pfizer in terms of FDA approvals, as it received nine new medicine/vaccine approvals. This year too, it gained approval for some interesting new products like two gene therapies for hemophilia, Hympavzi (marstacimab) and Beqvez/Durveqtix (fidanacogene elaparvovec).Pfizer faces its share of challenges, the key being declining sales of its COVID-19 products. Pfizer also expects a significant impact from the loss of patent exclusivity in the 2026-2030 period, as several of its key products will face patent expirations. However, Pfizer’s new products/late-stage pipeline candidates and newly acquired products, including those acquired from Seagen, position it strongly for operational growth in 2025 and beyond.The company continues to pay regular dividends. Its dividend yield stands at around 6%, which is quite impressive. Also, Pfizer expects cost cuts and internal restructuring, including layoffs, to deliver savings of $4 billion in 2024. Huge profits from its COVID products strengthened its cash position. The funds are being used to make acquisitions, increase dividends, buy back shares and reduce debt.Stay Invested in PFE StockNo matter how the third-quarter results play out, we suggest that those who already own the stock may stay invested to see how Pfizer’s new products perform. Some investors might consider buying this pharmaceutical giant’s stock at the rock-bottom valuation for long-term gains.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AstraZeneca PLC (AZN): Free Stock Analysis Report Pfizer Inc. (PFE): Free Stock Analysis Report Novo Nordisk A/S (NVO): Free Stock Analysis Report Eli Lilly and Company (LLY): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks