Pfizer Inc. (PFE) beat analysts’ estimates for second-quarter profit and ramped up its full-year earnings guidance, as the U.S. drugmaker expects medical visits and vaccination rates to gradually increase.
The stock rose almost 4% to $39.02 at the close on Tuesday as Pfizer raised its annual sales range guidance to $40.8 billion to $42.4 billion. Previously, Pfizer had guided for yearly revenue of $40.7 billion to $42.3 billion. The drugmaker expects 2020 adjusted profit to be in the range of $2.28 to $2.38 per share up from $2.25 to $2.35 previously.
“While our near-term outlook has greater macroeconomic uncertainty than usual due to COVID-19, we are confident that the long-term outlook for our businesses remains solid,” said Pfizer Chief Financial Officer Frank D’Amelio.
In the second quarter, the U.S. drugmaker reported an adjusted profit of 78 cents a share beating analysts’ estimates for 67 cents a share. Sales dropped 11% to $11.80 billion from $13.26 billion year-on-year, exceeding analyst consensus of $11.58 billion.
Second-quarter revenues shaved off about $500 million, or 4%, because of COVID-19, and primarily due to disruptions in pediatric and adult patient visits in the US and lower demand for certain products in China. This was partially offset by increased U.S. demand for certain sterile injectable products, the company said.
The release of the financial results comes just a day after Pfizer and BioNTech SE (BNTX) announced the start of a global Phase 2/3 safety and efficacy clinical study to evaluate a single nucleoside-modified messenger RNA (modRNA) candidate from their BNT162 mRNA-based vaccine program against SARS-CoV-2.
Shares in Pfizer have in recent months recouped almost of their losses and are now trading down less than 1% year-to-date. Looking ahead, the $41.16 average analyst price target implies 5.5% upside potential for the drugmaker’s shares in the coming 12 months. (See Pfizer stock analysis on TipRanks).
What’s more, Mizuho Securities analyst Vamil Divan expects shares to continue their recent strength in the near-term following 2Q results. Divan reiterated a Buy rating on the stock with a $38 price target.
“The 2Q 2020 results, along with news that the company has started its Phase 2/3 trial for its COVID-19 vaccine should allow for further upside in Pfizer shares,” Divan wrote in a note to investors.
Overall Wall Street analysts have a cautiously optimistic outlook on the stock. The Moderate Buy consensus is based on 6 Buy ratings versus 9 Hold ratings.
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