Each week, I’ll give an overview of a stock and Licia Leslie will follow that up with a chart analysis the next day. Bill Griffo will chime in with macro analysis and Andrew Giovinazzi will then finish out the week with a volatility breakdown.
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Hey Traders,
There is no doubt that things got a bit frothy for the markets in 2021.
Companies that had no business having billion dollar valuations saw their valuations go into the hundreds of billions of dollars.
One name that was clearly a winner during the 2021 run was Pfizer Inc (Ticker: PFE), and for good reason.
We all know that PFE made a killing from COVID over 2020 and 2021.
But now that COVID vaccinations are waning and the pandemic has become endemic, is there hope for PFE to make another run to new all time highs?
Let’s discuss.
The Good
PFE is not a one trick pony like Moderna Inc (Ticker: MRNA). The company has a huge pipeline of drugs in the works.
Pfizer is working on a vaccine for RSV, as well as multiple oncology drugs.
They could launch as many as ten new drugs in the coming year – which is a crazy amount.
If any of them are blockbusters, we will be looking at PFE heading much higher, even with the company losing patents and COVID waning.
The company always seems to have a consistent stream of income that’s allowed it to have strong financials.
PFE had $100 billion in Revenue in the last year. This created $31 billion in revenue and really nice cash flow.
It also has a low PE of only 7.63.
The Bad
Pfizer is losing billions in patents and even more in Covid vaccine sales. Without a blockbuster, the revenue could flatline or drop.
But I think more importantly is for us to remember what kind of a stock PFE has been for most of its existence…
Boring.
Since 2012, when the stock was bottoming at 17, and through 2014, it saw some growth. Then it essentially hung out between 30 and 40 for the next 6 years.
This was by and large a very boring stock.
It paid a nice dividend and didn’t go up or down very much.
The Verdict
I think PFE is heading back to the 2014-2019 time period. It’s not going to be a mover or a shaker, but if you are looking for a stock unlikely to fall too much that pays a consistent dividend, PFE could be decent.
I would be a buyer of this stock anywhere below 35 and a seller above 45.
Questions about that? Leave a comment below!
Your Only Option,
Mark Sebastian