Pfizer reported strong Q1 results, with revenue of $14.9 billion and an adjusted profit of $0.82 per share, beating street estimates. The decline in sales was attributed to lower demand for Covid-19 products. Despite the beat, PFE stock is considered appropriately priced at around $28. PFE stock has seen a decline of 15% from $35 in early January 2021 to $30 now, underperforming the S&P 500. Returns for PFE stock were 60% in 2021, -13% in 2022, and -44% in 2023, indicating inconsistent performance.
In recent years, beating the S&P 500 has been challenging for individual stocks, including heavyweights in the Health Care sector and megacap stars like GOOG, TSLA, and MSFT. The Trefis High Quality Portfolio, however, has consistently outperformed the S&P 500 each year, providing better returns with less risk. As the macroeconomic environment remains uncertain with high oil prices and elevated interest rates, the future performance of PFE stock is uncertain. From a valuation perspective, PFE stock looks appropriately priced around $28, with an estimated valuation of $29 per share.
Pfizer’s Q1 revenue of $14.9 billion was down 19% year-over-year, driven by lower sales of Covid-19 products. Excluding Covid-19 products, sales growth was 11%, with strong performance from Vyndaqel, Abrysvo, Eliquis, and Pravnear family. Adjusted net margin decreased over 670 basis points to 31.4% due to higher R&D expenses, resulting in earnings of $0.82 per share. Looking forward, Pfizer expects 2024 sales to be in the range of $58.5 billion to $61.5 billion, with a $3.1 billion contribution from Seagen. The company forecasts an adjusted bottom line of $2.15 to $2.35 per share.
Despite the correction in PFE stock over the last year and the positive impact of the Seagen acquisition, the stock is considered appropriately priced around $28. Trading at 12x forward earnings, compared to a five-year average of 15x, a slight decline in valuation multiple seems justified. While PFE stock appears fully valued, it is important to compare how Pfizer’s peers fare on important metrics. For more valuable comparisons across industries, investors can explore Peer Comparisons and consider investing with Trefis Market Beating Portfolios for potential success.