Pfizer Stock Dips on Disappointing 2024 Revenue Forecast

Pfizer's (PFE) share price dropped significantly by 8.3% as of midday Wednesday, following the pharmaceutical giant's forward-looking guidance for the 2024 fiscal year. Investors showed their discontent with the company's projections, leading to a notable downturn in stock value.

Subpar Growth Projections for 2024

The company's revenue forecast for 2024 is set between $58.5 billion and $61.5 billion, marginally incorporating the anticipated $3.1 billion from its prospective Seagen acquisition. Despite this, the forecast suggests minimal growth over its 2023 revenue expectations, which are similarly pegged between $58 billion to $61 billion.

Furthermore, Pfizer has estimated an adjusted diluted earnings per share (EPS) for 2024 to be in the range of $2.05 to $2.25, once again accounting for the likely effects of the Seagen deal. In comparison, the adjusted diluted EPS for the current year is expected to hover around $1.45 to $1.65.

Impact of Diminished COVID-19 Product Sales

A significant factor in Pfizer's subdued outlook for 2024 is the sharp downturn in sales of its COVID-19 vaccine, Comirnaty, and its antiviral treatment Paxlovid. The company foresees that combined sales of these once high-demand products will plunge to $8 billion in 2024, a stark decrease from the $12.5 billion projected in 2023.

Excluding the underperforming COVID-19 portfolio, Pfizer's operational revenue is expected to grow by 8% to 10% in 2024. Nonetheless, the severe decline in demand for these products cannot be overlooked by investors, as they contribute to a significant part of the company's earnings.

Potential for Pfizer's Stock

Analyst opinions could shift following Pfizer's lackluster guidance, with downgrades potentially on the horizon. Despite this, some market analysts find the valuation of Pfizer's stock quite appealing. For a turnaround, the company must surpass quarterly earnings forecasts, though predicting when this will happen is uncertain.

For income investors drawn to high dividend yields, Pfizer's near 6.3% yield might make the stock an attractive purchase, especially after the latest drop. However, those looking for short-term gains might not find the stock appealing until more positive earnings reports emerge. Long-term investors, on the other hand, may view the present dip as an opportunity, anticipating future growth as the company gradually moves beyond the tough comparisons with its prior COVID-19 product sales.

Pfizer, Stocks, Earnings