Pfizer Beats Q2 Estimates and Upwardly Revises FY 2020 View

Pfizer Beats Q2 Estimates and Upwardly Revises FY 2020 View
July 29, 2020

 

The shares of Pfizer Inc (NYSE: PFE) rallied 3.94% or $1.48 to close at $39.02 on Tuesday after it reported better-than-anticipated fiscal 2020 second-quarter earnings. However, compared to Q2 2019, the company posted a steep decline in earnings and revenue. The market gave importance to the upwardly revised FY 2020 outlook.

The New York-based company reported second-quarter revenues of $11.80 billion, down 11% from $13.26 billion in the comparable quarter last year. Analysts polled by Refinitiv had anticipated revenues of $11.50 billion for the quarter.

The company has estimated that coronavirus was responsible for losing about $500 million (4%) in revenue as many people chose to work from home, leading to a decrease in new vaccinations and prescriptions.

For the quarter ended June 30th, the company posted a net income of $3.43 billion, or $0.61per share, compared with $5.05 billion, or $0.89 per share, in the prior year.

Excluding charges, adjusted earnings fell to $0.78 per share in 2Q 2020, from $0.80 a share last year, but higher than Refinitiv’s earnings estimate of $0.66 per share.

While revenue from the Biopharma unit increased 4% to $9.80 billion, revenues from Upjohn fell 32% to $2.01 billion. Notably, the UpJohn business segment will be merged with Mylan. The breast cancer drug Ibrance and blood thinner therapy mainly contributed to the increase in the sales of the Biopharma division.

Looking forward, Pfizer now expects to earn between $2.85 and $2.95 per share, instead of the $2.82 to $2.92 per share outlook issued earlier. Adjusted earnings are expected to be in the range of $2.28 to $2.38 per share, upwardly revised from the prior forecast range of $2.25 to $2.35 per share.

It also anticipates FY 2020 revenue in the range of $48.60 billion to $50.60 billion, reflecting an upward revision from the prior forecast range of $48.50 billion to $50.50 billion. Wall Street analysts anticipate adjusted earnings of $2.55 per share on revenues of $48.50 billion.

In a separate news report, Pfizer and German biotech BioNTech have disclosed that they have started their late-stage human trials of the COVID-19 drug candidate on Monday. The trial involves up to 30,000 volunteers aged 18 to 85 in 120 cities across the globe. If the trial goes through successfully, the companies anticipate presenting the trial records for regulatory review by early October. By the end of this year, Pfizer intends to supply a maximum of 100 million doses and about 1.30 billion doses by the end of next year.

Regarding the trial, BioNTech CEO Ugur Sahin said, “Our primary goal is to bring a well-tolerated, highly effective vaccine to the market as quickly as possible, while we will continue to evaluate our other vaccine candidates as part of a differentiated COVID-19 vaccine portfolio. Many steps have been taken towards this important milestone, and we would like to thank all those involved for their extraordinary commitment.”

As of date, over 16 million people across the globe have been affected by the virus, and over 650,000 have lost their lives. While around 150 vaccines are under development, 25 are undergoing human trials as per the data provided by WHO (World Health Organization).

The potential vaccine utilizes mRNA (messenger Ribonucleic acid) to trigger an immune response by the human body. Earlier in July, the companies stated that one of the four COVID-19 drug candidates had produced necessary neutralizing antibodies in all volunteers who received doses of between 10 and 30 micrograms.

A few days before, the US government stated that it would pay $1.95 billion to Pfizer and BioNTech to produce 100 million doses of the vaccine if found safe and efficient. The award is given under the Operation Warp Speed program, an initiative by the US government to expedite the development and production of vaccines to cure coronavirus infection.

Commenting on the COVID-19 vaccine development, Pfizer CEO Albert Bourla said, “We remain fully committed to confronting the public health challenge posed by the COVID-19 pandemic by collaborating with industry partners and academic institutions to develop potential approaches to prevent and treat COVID-19. Our researchers and scientists have made important progress toward developing an effective vaccine though significant additional work remains.”

The better-than-anticipated Q2 results and upward revision of the FY 2020 estimate are expected to keep the stock bullish in the short-term.

The historical price chart indicates that the stock of Pfizer has closed above its 50-day moving average. Additionally, the stock is having firm support at 32. The next resistance is anticipated only near 43. The stochastic RSI indicator is also in the bullish region. Therefore, we are expecting the stock to rally further in the days ahead.

pfe - technical analysis - 29th July 2020

Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.

Richard W

Richard W

Richard is the guy who know everything there is about the financial industry, working in a top firm for over 15 years, he will give the lowdown on some of the biggest companies in the world


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