Pfizer Inc. (NYSE:PFE) is gearing up to conclude the year with shares hovering near a decade-low, and a cloud of uncertainty looms over the possibility of a rebound in the wake of the company’s disheartening 2024 forecast. Despite being a pharmaceutical giant, Pfizer has witnessed a staggering 49% drop in its stock value this year, marking its most challenging year on record since 1981, according to Bloomberg’s annual performance data.
The substantial decline in 2023 has wiped out approximately $140 billion in market value, casting doubt on Pfizer’s ability to navigate successfully out of the pandemic era, especially as demand for COVID-19 shots and treatments diminishes. The recent uninspiring forecast is casting a shadow over the optimism that surrounded Pfizer’s acquisition of cancer drugmaker Seagen Inc., as analysts question its efficacy in filling the revenue gap left by declining Covid-related business.
Analysts on Wall Street are cautious about foreseeing a recovery from Pfizer’s post-pandemic setback, leading some to reduce their price targets on the stock by an average of 12% this week. Wells Fargo analyst Mohit Bansal expressed skepticism about an upside case, stating, “While we think downside could be limited after this guidance down revision, we struggle to see an upside case.”
This marks the second instance in two months that Pfizer has disappointed investors with its sales outlook. In mid-October, the company revised down its revenue and earnings forecast for 2023 following an agreement to retrieve doses of Paxlovid from the US government amid diminishing demand.
Pfizer’s stock has tumbled approximately 58% from its December 2021 peak when its market capitalization exceeded $300 billion. Investor sentiment has waned amid fading optimism for future Covid sales, with a keen eye on the company’s next potential blockbuster beyond the vaccine.
JPMorgan analyst Chris Schott expressed uncertainty about Pfizer’s recovery, stating, “We do not see a clear path for the stock to recover given the ongoing uncertainty on the company’s core earnings power.” Pfizer’s venture into weight-loss treatments has faced setbacks, including the suspension of two obesity pills’ development this year.
Analysts are divided on Pfizer’s fate, with 13 out of 28 analysts tracked by Bloomberg rating it as a buy and 15 as a hold. Wells Fargo’s Bansal, with a hold rating, emphasizes that Pfizer’s recovery hinges on its non-Covid business, suggesting that the stock could be a “work in progress” throughout 2024.
Pfizer’s rival, Moderna Inc., is grappling with a similar decline in demand, struggling to move beyond its blockbuster Spikevax vaccine. Moderna’s stock has plummeted about 85% from its 2021 pandemic peak, and Pfizer’s 2024 forecast raises concerns about the global demand for vaccines, potentially impacting Moderna’s outlook as well.
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