Pfizer shares are down 37% so far this year.
Courtesy Pfizer
Pfizer
stock is higher early Monday after the pharmaceutical company lowered guidance.
Pfizer stock (ticker: PFE) is up 0.9% to $32.39 in premarket trading Monday. On Friday, after the market closed, Pfizer updated its guidance along with a statement on how the U.S. will return treatments of Paxlovid, the drug that treats Covid-19 symptoms. It now expects revenue for the year to come in at $58 billion to $61 billion, down from an earlier range of $67 billion to $70 billion.
Pfizer now expects adjusted diluted earnings per share of $1.45 to $1.65 this year, down from its original guidance of $3.25 to $3.45. That implies that the company now expects to lose money in the second half of this year, as its adjusted diluted earnings for the first two quarters were $1.90 per share.
The company also announced it would begin a cost-cutting program Pfizer had previewed over the summer that will save $3.5 billion per year. The program will cost $3 billion in severance and other implementation costs.
Pfizer said that the U.S. government will return 7.9 million courses of its Covid-19 antiviral Paxlovid, roughly a third of the 24 million courses the government purchased since the pill’s introduction. The government will receive a credit for future doses to be used by Medicare, Medicaid, a stockpile, and federal-assistance programs for uninsured patients.
Pfizer did well in the pandemic by producing one of the first vaccines against the virus. That brought in record revenue for two years and boosted shares through the start of 2022. Since then, vaccination rates have been falling, along with Pfizer stock, which has lost 37% so far this year through Friday’s close.
The company, which reports third-quarter earnings on Oct. 31, said Friday it will take a noncash charge of $5.5 billion in the quarter to account for writing off $4.6 billion of Paxlovid, and writing off $900 million of other inventory.
American depositary receipts of
BioNTech
(BTNX), Pfizer’s partner in developing Covid treatments, are dropping 4.3% in Monday premarket trading after the company also said it would take a charge for writing off vaccine inventory.
Analysts at BMO Capital Markets led by Evan David Seigerman cut the price target for Pfizer stock after Friday’s announcement to $33 from $44. The guidance reduction “raises questions around management’s forecast and of the evolving Covid-related business,” Seigerman wrote. He nevertheless maintained his Outperform rating on the stock until management explains its strategy.
Analysts at Citi kept a Neutral rating on Pfizer stock with a $35 price target, and said the guidance revision could be “an important clearing event for the stock.”
Wells Fargo struck a similar note. “The magnitude of weaker demand will likely surprise investors,” said analysts led by Mohit Bansal. “Still, it is a good first step toward recovery.” The analysts cut the price target to $35 from $39 on Pfizer stock but kept an Equal Weight rating.
Write to Brian Swint at [email protected] and Josh Nathan-Kazis at [email protected]
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