Pfizer stock price forecast: a cure for the markets?
The Pfizer stock price forecast experienced an unexpected shot in the arm today after the company announced that its coronavirus vaccine candidate is 90 per cent effective
It’s very rare that an announcement from a single company can send shockwaves through the entire stock market. But on November 9, Pfizer achieved exactly this when it revealed that large-scale trials had shown that its vaccine candidate is 90 per cent effective.
This is news that will serve as dynamite for the Pfizer stock price forecast. Preliminary results show no safety concerns were raised after tests on more than 43,000 people, and no serious side effects. Further data is going to be available at the end of this month – and if the company succeeds in getting emergency authorisation from regulators, the first doses could begin to be administered by Christmas. Manufacturing has already begun en masse.
Given how government bodies around the world were looking for a vaccine that had 50 per cent effectiveness, the company’s achievement in conjunction with BioNTech is set to give the Pfizer share price outlook a dramatic boost. But it’s a little too early to start popping the champagne and hugging your loved ones – it’ll take time to produce enough doses for all.
Scientists at the company have said they are “near ecstatic” at the outcome of the trials, with Pfizer chief executive Dr Albert Bourla adding:
“We are reaching this critical milestone in our vaccine development programme at a time when the world needs it most with infection rates setting new records, hospitals nearing over-capacity and economies struggling to reopen.”
Here, we’re going to look at the latest Pfizer stock predictions – and examine the impact on global indices and other shares that are sensitive to coronavirus developments.
Pfizer share price news: happy Monday
The Pfizer stock news was announced at lunchtime in London – a couple of hours before the New York Stock Exchange began trading for the week. At the open, PFE surged by 15 per cent to 52-week highs of $42. By the middle of the session, share prices had cooled slightly to just under $40.
Of course, the upbeat development also came as markets digested the news that Joe Biden will become the next President of the United States.
Principal Global Investors’ chief strategist Seema Shah was quoted by City AM as saying:
“Don’t forget too, that the election outcome is arguably the most favourable scenario for investors… al the chips are starting to line up, and market sentiment may be in the early stages of a burst of positive energy.”
Even before this momentous milestone was reached, the Pfizer stock price forecast was looking exceedingly promising. In a note sent to investors a few weeks ago, SVB Leerink predicted that the company’s vaccine would generate $3.5bn in sales in 2021 – falling to $1.4bn in 2022. Crucially, this estimate was on the basis that the vaccine was 80 per cent effective, meaning that we could end up seeing some upside in these figures. SVB Leerink’s analysts went on to predict that revaccinations will be needed every two years in order to maintain a high level of immunity.
When it comes to whether Pfizer stock is a buy or sell, one factor to take into account is that this vaccine might not end up being a cash cow for the pharmaceuticals giant. SVB explained that the company has been facing challenges in other parts of its business – and in any case, its treatment’s market share could rapidly diminish as other vaccine candidates catch up and gain approval too.
Let’s take a look at how the Pfizer stock forecast is shaping up. According to CNN Business, the high-end Pfizer share price forecast predicts there will be a 32.5 per cent rise in the stock’s value to $53 by mid-November 2021. The median estimate suggests the stock will edge up 2.5 per cent to $41 over the same period, while the lower end prediction indicates we’ll see a 12.5 per cent fall to $35. Seven analysts recommend buying the stock, one says it will outperform, and 11 have a hold rating.
As we mentioned earlier, this news has significance that extends far beyond the Pfizer share price forecast. Let’s take a look at how the wider market was faring on Monday.
The winners and losers
Following on from Pfizer’s announcement, the FTSE 100 in London surged beyond the 6,000 mark – rising by 5 per cent in the space of just 35 minutes. This was the index’s best day since March, when lockdown began. Over in New York, the Dow was up 5.6 per cent when trading commenced, and the S&P surged by 3.6 per cent.
Companies that have seen their operations decimated by the pandemic were the biggest risers. The cruise company Carnival, which has been forced to suspend its voyages, saw shares surge by a whopping 43 per cent at Monday’s open. Other operators in the sector, such as Royal Caribbean Cruises, leapt 29 per cent on the news.
And then there were the airlines. American Airlines and Delta Air Lines were both up 20 per cent when trading commenced in New York. Clearly, there’s a lot of optimism that the vaccine will allow people to go on holiday. The Walt Disney Company is another brand that’s heavily exposed to tourism because of its theme parks, and it spiked by 14 per cent.
Unfortunately, there were a sizeable number of stocks that didn’t enjoy gains: primarily those of companies experiencing higher levels of demand as a result of coronavirus restrictions. Zoom Video Communications and Peloton both suffered double-digit declines of 16 per cent and 20 per cent respectively. It seems traders think that there will be less demand for video conferencing and at-home exercise bikes in the not-too-distant future. British brands that are instrumental in delivering online groceries and takeaways, such as Ocado and Just Eat, also tipped into the red on Monday afternoon.
Usually, the companies involved in putting coronavirus vaccine candidates through their paces are exceedingly cautious when giving an update on their progress. They don’t want to spread false hope, especially considering that billions of people are desperate to return to normal. But the language used by Pfizer during its news conference was unrelentingly positive – with Dr Bourla hailing the results as a “great day for science and humanity”. After perpetual uncertainty over whether a functioning Covid-19 vaccine was even possible, an end to the global pandemic may finally be in sight.
FURTHER READING: Covid-19 vaccine over 90 per cent effective, Pfizer says
FURTHER READING: Next stock market crash predictions: is a mass sell-off looming?