Pfizer stock price forecast: the Covid-19 booster effect

Pfizer stock price forecast – can the pharma giant generate profits from Covid-19 boosters?

Contents

The global landscape has undoubtedly shifted. Covid-19 is evolving from a pandemic to becoming endemic. With many in the developed world already vaccinated, analysts are questioning the sky-high valuations of pharma giant Pfizer.

Some analysts suggest that, as the demand for jabs drastically reduces in the coming year, profits will in turn reduce markedly by 2024.

But are the analysts correct? Will the Pfizer stock price forecast go up or down? Let’s look at the share price.

Pfizer’s share price soared in mid-August to record highs of $50.42 after the US and UK announced booster programmes starting as early as autumn. Since hitting that record high, the pharma company’s stock price has fallen gradually, standing at roughly $42.86 on 22 October.

Pfizer’s share price
Pfizer’s share price – Credit: Currency.com

The company’s results for the first and second quarters of 2021 have been unsurprisingly robust.

The firm made $18.9bn (£13.6bn) in revenues in Q2 2021, a staggering growth of 92% from the $9.8bn earned in Q2 2020. While the company engages in other areas of the pharma industry – including drugs for rare diseases and oncological issues – the vaccine is by far its most profitable product. The vaccine brought in revenues of $9.2bn in 2021 compared with $1.2bn in the same period in 2020. The results showed 86% operational growth overall, but when you exclude revenues from the vaccine, the business posted 10% operational revenue growth.

In the update, the firm increased full-year 2021 revenue expectations to $78bn-$80bn, predicting $33.5bn of that revenue to be from the vaccine.

Pfizer stock price forecast 2021: known unknowns

While some investors perceive the pharma company’s market cap of $246.1bn to be a fair valuation, others, including Cory Kasimov, biotechnology analyst at JPMorgan, disagree: “The market is pricing in as if these companies are going to be doing $20bn per year every year almost indefinitely,“ he said. “The share prices of these vaccine companies are being driven more by momentum and headlines relating to variants, boosters, full approval, and not to fundamentals.”

Such sentiments are echoed by Damien Conover, director of equity strategy at Morningstar, who said: “It’s increasingly likely that a pretty wide group of folks get a third booster in the near term, the next eight to 12 months… It’s less clear if everyone needs boosters going forward. There’s an important distinction between a third booster and an annual booster.”

On 21 October, Pfizer and BioNTech announced results from a phase-three study that showed their booster shot was 95.6% effective against symptomatic Covid. The results of the trial, which followed 10,000 people aged 16 and older, could bolster arguments that a third dose is necessary.

Pfizer stock: buy or sell?

So will the Pfizer stock price go up in 2021? On 22 September, the FDA and the Centers for Disease Control and Prevention in the US signed off on additional Pfizer shots for those aged 65 and older, as well as healthline workers and those in the high-risk category with existing medical conditions aged 18 and above. President Joe Biden has also indicated that he believes the boosters will eventually be offered to everyone. On 27 September, Biden publicly received a Pfizer booster jab while urging the unvaccinated to get a shot, as more than a fifth of Americans have yet to get a single dose. 

On 20 October, a Pfizer booster dose was also authorised for emergency use by the FDA in eligible individuals who have had a primary vaccination with a different Covid-19 vaccine. The Pfizer booster has also been given the go-ahead in the EU by the European Medicines Agency.

However, as parts of the world head into a long winter and with fears rising over new waves and strains of Covid-19 appearing, the success of these booster rollouts has yet to be measured. Making an accurate Pfizer share price forecast remains tricky while governments continue to grapple with getting the public to trust vaccines and boosters. 

Pfizer Inc
Daily change
42.87
Low: 42.69
High: 43.01

The Biden administration is set to purchase another 500 million Pfizer doses to give to developing countries, according to US media reports. While the plan is not finalised, the announcement of the purchase is scheduled to take place at the UN General Assembly meeting this month. The US previously purchased 500 million vaccines for the developing world in June.

Developed countries, like the US, have been increasingly criticised for rolling out booster jabs while poorer countries have no access to vaccinations. Experts from the World Health Organization (WHO) estimate that up to 11 billion doses are required to vaccinate 70% of the world’s population.

Several US politicians, including Senator Tina Smith, wrote to Biden highlighting inequality around the vaccines: “So far, 5.82 billion doses have been administered globally, but less than 2% of the population living in low-income countries received even one dose… Clearly, there is an inequitable distribution of Covid-19 vaccine doses, and it is getting worse.”

Increased pressure to donate vaccines is no doubt music to the ears of the pharma giant. If such plans to vaccinate 70% of the world were to be realised, Pfizer could be set to profit hugely. This could in turn reflect favourably on the Pfizer share price forecast.

Children to be vaccinated

On Monday 20 September, Pfizer and BioNTech announced the results of a successful vaccine trial in children aged five to 11.

According to the press release, the vaccine was “safe, well tolerated and showed robust neutralizing antibody responses”.

In response to the results, Albert Bourla, chairman and chief executive officer of Pfizer, said: “We are eager to extend the protection afforded by the vaccine to this younger population, subject to regulatory authorisation, especially as we track the spread of the Delta variant and the substantial threat it poses to children… Since July, paediatric cases of Covid-19 have risen by about 240% in the US – underscoring the public health need for vaccination.”

With the FDA due to approve these results this month, plus results from early trials on under five-year-olds due to be released later this year, the outlook for continued earnings growth looks likely.

Pfizer stock price: market dominance

The Pfizer vaccine has largely held dominance over other vaccines due to the speed at which its product was developed and rolled out, as well as the fact it appeared to offer certain advantages over rival jabs produced by the likes of AstraZeneca and Johnson & Johnson.

Earlier this year, AstraZeneca’s vaccine suffered a setback after officials in Germany said that it shouldn’t be administered to patients under the age of 60. And while J&J’s vaccine is 66% effective at preventing moderate to severe Covid-19, Pfizer appears to be ahead of the pack with a 95% success rate.

There have been challenges for the Pfizer stock forecast along the way, however. The company caused controversy in January when it announced it was cutting the number of Covid-19 vaccines that it planned to deliver to certain European countries – by 50% in some cases. This inevitably slowed down the ambitious programme to vaccinate those most at risk from the pandemic. And, given how patients require two doses to obtain full protection, there were fears it could affect those due for their second shot.

Last month, Pfizer suffered another setback as a study undertaken by the Centers for Disease Control and Prevention (CDC) found that protection against hospitalisation is reduced just four months after taking the Pfizer vaccine. The study, involving 3,700 hospitalised individuals, concluded that while the effectiveness of Moderna vaccine against hospitalisation remained basically unchanged after four months, Pfizer vaccine’s effectiveness reduced from 91% to 77%.

While continued studies are required to confirm these results, it could signal future problems for Pfizer. As more and more vaccines are approved, Pfizer may well suffer competition from vaccines that can prove their effectiveness over a longer period.

Pfizer stock price forecast 2021

Looking ahead to the rest of 2021, developments in the fight against the Covid-19 pandemic have the potential to affect the Pfizer share price forecast – both positively and negatively.

The likelihood of mass booster vaccinations and annual vaccination programmes in the developed world appear unlikely at present.

If, however, wealthier countries rally together in order to vaccinate the developing world, Pfizer may well stand to gain vast amounts of business.

Pfizer’s stock price could also be affected if better vaccines emerge – especially if they eliminate some of the downsides associated with its jab. Pfizer/BioNTech’s vaccine needs to be kept at a temperature of -70 degrees Celsius, and once it’s been delivered to a vaccination centre, jabs need to be kept in a fridge and used within 10 days. This adds a whole extra layer of logistics – something that governments around the world will be keen to eliminate.

Regardless of the continued success of Pfizer over the next three or four years, the pharma company cannot rely on this offering alone in the long term.

While Pfizer’s other products have seen growing returns, it’s unlikely that unless Pfizer can produce another ‘blockbuster’ offering, the pharma company will continue being able to justify such a high market cap in five or 10 years.

Pfizer stock forecast: what’s next?

So, will Pfizer stock go up in 2021? With a lot of unknowns around booster jabs and whether Pfizer will continue to dominate the market, much remains to be seen.

Analysts are mixed in outlook regarding Pfizer share price movement. The low-end Pfizer stock price forecast suggests there will be a 13.5% fall to $38, while the median prediction is that PFE’s stock will rise by 0.3% to $44. At the most optimistic end of the scale, there’s a prediction that the Pfizer share price will hit $61 this year – a 39% surge.

According to the FT, two analysts currently have a buy rating in place, while five say it will outperform the market over the coming 12 months. 16 hold ratings have been issued, zero analysts think Pfizer will underperform, and zero recommend selling up.

The Pfizer stock price may well rise in the short term, but in the long term, unless it develops a product with similar impact and demand, the Pfizer stock price could well go down. As with all stocks and investments, remember to always do your own research first and never spend more than you can afford to lose.

It could be, but the success of the booster rollouts across the world remains to be seen. As always, remember to do your own research first and factor in the latest news developments before buying the stock, and never spend more than you can afford. 

It may do, but it may not. Remember that prices can go down as well as up. At present, there are many variables at stake as the world continues to recover from Covid-19. 

You can invest in tokenised Pfizer shares with Currency.com. Remember to always factor in the latest Pfizer news before buying. 

Further reading

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