Pfizer Q1 preview: Where next for Pfizer stock?

When will Pfizer release Q1 2022 earnings?

Pfizer is scheduled to publish first quarter earnings for 2022 before US markets open on Tuesday May 3.

Pfizer Q1 earnings preview

Pfizer celebrated a record year in 2021 as its Covid-19 vaccine that was developed in partnership with European outfit BioNTech transformed its finances and was the main driver behind the company’s revenue almost doubling last year. In fact, having had no Covid-19 drugs within its portfolio in 2019, its vaccine and its newer Paxlovid treatment accounted for a whopping $36.9 billion of Pfizer’s $81.3 billion of revenue in 2021.

Wall Street forecasts Pfizer’s revenue will jump over 67% year-on-year to $24.35 billion in the first quarter and that adjusted EPS will follow 66% higher to $1.55.

This will once again be boosted by sales of its Covid-19 drugs as it comes up against fairly weak comparatives from early last year, when sales of its jab were only just starting to take off. Analysts believe Pfizer sold $10.6 billion worth of its vaccine in the first quarter and $2.4 billion of Paxlovid, which is only just starting to gain traction.

Paxlovid sales have only recently started, so will only add to the topline in 2022 and provide the biggest catalyst this year. Analysts at Bloomberg Intelligence suggests every $10 billion of Paxlovid sales will add around $1 to EPS and boost cash generation by $7 billion. With this in mind, Pfizer has said it expects to sell $32 billion worth of its Covid-19 vaccine in 2022 and deliver $22 billion of Paxlovid sales. This means Pfizer’s Covid-19 drugs will account for over half of its total revenue this year.

The outlook for 2022 will go a long way in deciding how markets react to the results this week as investors gauge how confident Pfizer is feeling about the rest of the year. Importantly, this will be the easiest quarter in terms of comparatives for both revenue and earnings, which will both become harder to top as the year goes on and likely to lead to a slowdown in growth compared to the bumper figures reported in 2021. Pfizer’s initial guidance for 2022 that was provided in February is targeting revenue of $98.0 billion to $102.0 billion and adjusted EPS of $6.35 to $6.55. That puts Pfizer on course to enjoy another record year for the business.

Still, Wall Street believes the outlook is too conservative even know it is coming up against record figures from last year, when both revenue and earnings almost doubled, and that it can deliver revenue of $106.8 billion and adjusted EPS of $7.10 in 2022. This suggests some expect Pfizer to upgrade its outlook at some point this year.

Pharmaceutical companies have historically been better at navigating inflationary environments and better able to pass on higher costs through to customers, but expenses will still be on the radar. Pfizer has said a rise in selling, general and administrative costs this year will be countered by a drop in R&D spending, although it is also facing a significantly higher tax rate of 16% this year compared to just 7.6% in 2021.

Where next for PFE stock?

Pfizer shares have fallen over 18% since peaking at an all-time high last December at $61.71 and today trade closer to $50.

Shares are currently testing the 200-day moving average, which currently sits at $49 and has proven to be a reliable floor for the stock since the middle of 2020. Pfizer shares have briefly fallen below this level since then but has swiftly rebounded when it has, suggesting it could temporarily sink to as low as $45 in the meantime. The RSI remains in bearish territory but trading volumes have consistently fallen over recent months and the 5-day average is almost one-third below the 100-day average.

On the upside, Pfizer shares need to recapture the 50-day sma at $51 and the 100-day sma at $53 before it can target the $55 level of resistance seen earlier this month. Beyond there, it can eye north of $56 to bring fresh all-time highs into play.

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