Pfizer Stock Downgraded by Bank of America Due to COVID Uncertainty

Pfizer Stock

Pfizer Stock (NYSE:PFE)

Pfizer (NYSE:PFE) stock fell by approximately 2% before the market opened on Wednesday after Bank of America downgraded the pharmaceutical giant to Neutral from Buy. The move was justified by an uncertain outlook for the company’s COVID franchise, comprised of its mRNA-based vaccine Comirnaty and oral antiviral Paxlovid.

The analysts, led by Geoff Meacham, have issued estimates higher than the consensus regarding the size of the revenue decline caused by Comirnaty and Paxlovid in 2023. They also need to cite certainty regarding how the company’s upcoming launches will be able to make up for a revenue hole of $17 billion caused by the loss of exclusivity.

Despite this, the team is keeping its per-share objective on Pfizer (PFE) at $60 and highlighting the following medications that the business will be releasing that will target ailments such as migraines, RSV, and ulcerative colitis.

The analysts said that the COVID franchise is anticipated to be in a state of sustained decline throughout the period and that these drugs and others in the phase 3 pipeline might take years to contribute to the P&L.

While BofA does acknowledge that Pfizer stock, in terms of 2023 projections, trades below peers, BofA questions whether or not there may be a share rerating driven by impending new drugs since this “is not expected to materialize in 2023,” according to analysts.

Despite this, over the last three months, contributors to Seeking Alpha have grown much more optimistic about the prospects of Pfizer stock. In December, SA Author Paul Franke argued that “the corporation would be net debt free in early 2023 and in its greatest financial health since 2009.”

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