Pfizer Stock Price Forecast January 2022 – Time to Buy PFE Stock?

Pfizer (NYSE: PFE) stock is trading with a YTD loss this year after the strong outperformance in 2021. The stock is now down almost 9% from the 52-week highs. However, its drawdown from the peak is much lower than fellow vaccine maker Moderna, which trades at less than half its peaks.

Vaccine stocks have been in the limelight amid the rising global cases of the omicron variant, which has necessitated booster doses. What’s the 2022 forecast for PFE stock and can it continue to outperform in 2022?

Pfizer stock recent developments

Pfizer stock has been in the news amid the vaccine for the omicron variant. The company’s CEO Albert Bourla has said that the vaccine for the omicron variant would be ready by March. “The hope is that we will achieve something that will have way, way better protection particularly against infections, because the protection against the hospitalizations and the severe disease — it is reasonable right now, with the current vaccines as long as you are having let’s say the third dose,” said Bourla speaking with CNBC.

Pfizer executives have been expressing their views about the pandemic frequently. Last month, Nanette Cocero, global president of Pfizer Vaccine said that he believes that by 2024, COVID-19 would become endemic. At the same investors’ call, Pfizer chief scientific officer Mikael Dolsten added “When and how exactly this happens will depend on the evolution of the disease, how effectively society deploys vaccines and treatments, and equitable distribution to places where vaccination rates are low.”

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PFE stock forecast

As the omicron variant continues to play havoc, booster doses of COVID-19 vaccines are a hard reality. This is what makes Pfizer, whose COVID-19 vaccine is the only shot with a full FDA approval, an interesting bet. Wall Street analysts have also been taking a bullish view of the stock and have been raising their target prices.

Looking at the consolidated ratings, of the 23 analysts covering PFE stock, 10 have a buy rating while 12 have a hold rating. One analyst has rated the vaccine maker as a hold. Its median target price of $56 which is similar to current prices. Its street high target price of $75 is a 33.4% premium while the street low target price of $46 is a discount of 18.2% over current prices.

Bank of America raised Pfizer’s target price

Bank of America, which had a neutral rating on Pfizer stock in December, upgraded it to a buy earlier this month and assigned a target price of $70. “Since 2020, investors have focused squarely on Pfizer’s success in battling C-19, namely through vaccines and now oral agents. However, in 2022 we expect the Pfizer narrative to shift to the benefits of its C-19 success in the form of stepped up pipeline/portfolio investments, especially given [more than] $100B in cash generated to 2025,” it said in its note.

Companies that produce COVID-19 vaccines have been reporting strong cash flows. While markets believed that the boost would soon fizzle away as more people get fully vaccinated, the very definition of fully vaccinated has changed.

Pfizer is expected to use the rising cash flows for acquisitions as well as increase the shareholder payout. Its dividend yield of 2.8% is already over twice the S&P 500’s yield. In its note, BofA said, “We expect a number of internal pipeline readouts to add confidence in the portfolio; some of these readouts include RSV, flu, and Lyme disease vaccines.”

Pfizer stock long term forecast

Pfizer has a healthy pipeline which would be a key driver in the long term. The company’s two-drug regimen called Paxlovid already has a EUA in the U.S. and the European Union is also expected to soon decide on approving the drug as the continent battles with a rising caseload of omicron cases.

PFE stock technical analysis

PFE stock is looking bullish on the charts and trades above the 50-day, 100-day, and 200-day SMA (simple moving average). Its 14-day RSI is a neutral indicator while the 12,26 MACD (moving average convergence divergence) gives a buy signal. The stock looks set for a technical breakout and positive developments on the omicron vaccine and Paxlovid could be near-term drivers.

Should you buy Pfizer stock?

Valuing Pfizer stock can be a tricky exercise. It trades at an NTM (next-12 months) PE multiple of 10.1x which looks quite attractive. However, the multiples should be seen in context as analyst estimates suggest a fall in sales and profits after 2022. The company’s sales are expected to more than double in 2021 and then rise 18.8% in 2022. However, in 2023 analysts expect its sales to fall 18.8% as the contribution from COVID-19 vaccines comes down.

Similarly, its EPS is expected to rise 45% in 2022 and then fall 21.6% in 2023. We see something similar in cyclical names whose valuation multiples bottom at the cyclical peak. Drawing an analogy with Pfizer, markets expect its earnings to peak soon. As more people get fully vaccinated and also take a booster shot, the demand for PFE’s COVID-19 vaccines is expected to fall sharply.

However, we still don’t know what path this deadly virus would take. While some observers believe that the omicron variant could spell the endgame for the pandemic, many others are not convinced. WHO has warned that future variants could be deadlier which would mean continued demand for the annual booster shots.

Overall, Pfizer stock looks a good buy looking at the continued demand for its COVID-19 vaccines. Also, it has an encouraging pipeline that would drive long-term growth. PFE could be one defensive stock to have in your portfolio and the risk-reward looks reasonable at these price levels.

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