Down 25% In A Year Will Pfizer Stock Rebound To Its Pre-Inflation Shock Level?

Pfizer stock (NYSE: PFE) currently trades at $37 per share, aligning with the level seen in March 2021, and it can see higher levels over time. PFE stock was trading at around $52 in early June 2022, just before the Fed started increasing rates, and is now 30% below that level, compared to 15% gains for the S&P 500 during this period. This underperformance of Pfizer
PFE
stock can be attributed to declining revenues in recent quarters. Pfizer benefited from strong demand for its Covid-19 products in 2021 and 2022, but that trend has now reversed. The contribution of Covid-19 products in 2023 is expected to plunge about 62% y-o-y to $21.5 billion.

Returning to the pre-inflation shock level of over $60 means that PFE stock will have to gain more than 65% from here, and we don’t think this will materialize anytime soon. That said, there is upside potential from its current levels. We estimate Pfizer’s valuation to be around $49 per share, implying over 30% gains. This is because the company expects 2023 to be the low point and sales of Covid-19 products to rise from 2024. Pfizer’s other products, including Eliquis (alliance revenue), Vyndaqel, and Prevnar, will likely see steady sales growth with market share gains. In fact, non-Covid operational sales growth is expected to be 6%-8% in 2023.