Can Pfizer’s share price stay in good health after Q3 earnings?

Pfizer’s [PFE] revenue is expected to jump 87% and earnings are seen up 51% on year when it reports its third-quarter earnings on 2 November, helped by the rollout of the COVID-19 vaccine which was not the case in the comparable quarter last year.

The pharmaceuticals giant’s share price has been buoyed by the successful development and rollout of the COVID-19 vaccine it made in partnership with Germany’s BioNTech [BNTX].

“The speed and efficiency of our efforts with BioNTech to help vaccinate the world against COVID-19 have been unprecedented, with now more than a billion doses having been delivered globally,” said Pfizer CEO Albert Bourla in July.

According to City Index, Pfizer is expected to hit $33.5bn in sales this year from the vaccine alone and there will be more to come as it is rolled out among children, and the company develops booster jabs and new protections against variant strains.

The prediction on how long the company will maintain this growth is mixed, because on a less-than- stellar uptake of booster jabs in the UK and uncertainty over pricing in less-developed countries.

Over the last 12 months, its share price has climbed 27.45%, compared with rival Moderna [MRNA] up 414% and AstraZeneca [AZN] 17% higher, as per close 29 October.

Relying on vaccines

Wall Street analysts are expecting Pfizer to report revenues of $22.71bn in the third quarter. The growth rate is sequentially up slightly from the 86% year-on-year rise recorded in the second quarter. Earnings per share are tipped to increase to $1.09 from $0.72 the year before.

Analysts are cautious heading into 2022, according to City Index. It estimates vaccine sales for the year ranging from a low of $9bn to a high of $34bn.

The volatility is due to uncertain demand for booster shots and sales in lower- and middle-income countries “where the economics may be different”.

Analyst firm Zacks forecast higher sales for Pfizer’s blood-thinning drug Eliquis and prostate cancer drug Xtandi. Its consensus estimates for oncology and vaccine products are $3.19bn and $14.51bn, respectively.

In the second quarter, Pfizer recorded EPS of $1.07 against forecasts of $0.97 per share and above the $0.62 in the same period in 2020. Revenue came in at $18.98bn, against the $18.74bn forecast and far above the $9.8bn in the same period in 2020. Revenue from its oncology unit rose by 19% year over year to $3.1bn.

According to Market Screener, analysts have a consensus rating of ‘outperform’ and an average target price of $45.72.

Looking for new channels

There is a shadow over Pfizer’s share price since its R&D costs have likely risen disproportionately given the expedited search for COVID-19 vaccines and antiviral medicines.

Most analysts expect Pfizer’s vaccine revenues in 2022 to be lower than the current year, but a recent study from Airfinity still forecasts gigantic sales of $54.5bn next year, as reported by the Motley Fool.

Motley Fool contributor Brian Orelli believed the vaccine pricing for developing nations may fall to $13 a dose from an estimated $19 a dose now.

Other products in Pfizer’s pipeline and its ability to leverage the partnership with BioNTech for new vaccines against other viruses will be in focus as a Pfizer share price trigger.

Bumper sales or not, Cantor Fitzgerald analysts remain bullish, setting a $61 price target on the stock. Analyst Louise Chen said Pfizer’s “pipeline advancements and product sales continue to exceed our expectations”.