The central theses
- Analysts estimate adjusted earnings per share at $ 0.76 compared to $ 0.62 in the first quarter of fiscal 2020.
- Pfizer is expected to report COVID-19 vaccine sales of $ 2.2 billion for the quarter.
- The company-wide revenue growth rate is expected to more than triple from the fourth quarter of fiscal 2020, largely driven by sales of COVID-19 vaccines.
Pfizer Inc. (PFE), one of the world’s largest pharmaceutical companies, has sold millions of doses worldwide in the past few months of its COVID-19 vaccine, which is developed by Pfizer and BioNTech S.E. ((BNTX). The pandemic has resulted in near-unprecedented demand for the drug, which Pfizer says will generate $ 15 billion in sales for the company in 2021. This makes it one of Pfizer’s best-selling products. The Biden government’s goal of vaccinating most of the US population by the end of this summer will further fuel demand for Pfizer’s vaccine.
Investors will be focused precisely on whether Pfizer’s vaccine sales can help the company build on the strong growth in adjusted earnings per share last quarter (EPS) and revenue growth if earnings on May 4, 2021 are reported in the first quarter of fiscal year 2021. The company had five consecutive quarters of earnings declines and six quarters of revenue declines prior to the fourth quarter of fiscal 2020. For the first quarter, analysts predict that both adjusted EPS and revenue growth will increase year over year after declining in the same quarter last year. In addition, sales are expected to grow three times as fast in the first quarter as they did in the fourth quarter of 2020.
Investors will also be paying close attention to another key metric: Pfizer’s COVID-19 vaccine sales for the quarter. While there is little comparative data, given that Pfizer’s vaccine has only been available for several months, the first-quarter revenue from the vaccine could shed some light on whether the company is able to continue to address the pandemic quickly and effectively react. Analysts are forecasting nearly $ 2.2 billion in sales for the company’s COVID-19 vaccine, which is dramatically higher than when the vaccine began selling in the fourth quarter of fiscal 2020.
Pfizer stock struggled over the past year. Through May 2020, the company performed roughly in line with the broader market before collapsing in June. It rebounded but traded sideways until the final weeks of 2020 when news broke of the company’s coronavirus vaccine and its approval in the United States. At this point, stocks rose briefly before trending down through early March 2021. Since then, Pfizer stock has gradually rallied, although it is still significantly underperforming the broader market. Pfizer stock returned 10.7% 1-year total return versus 43.6% on the S&P 500.
Pfizer earnings history
Pfizer saw declining EPS declines year over year for five consecutive quarters starting in the third quarter of 2019. The hardest hit quarter over this period was the fourth quarter of fiscal 2019, down 42.7% year over year. As the pandemic accelerated in the first quarters of fiscal 2020 and the shelter recommendations went into effect, the demand for new prescriptions and vaccinations became apparent. It wasn’t until the fourth quarter of fiscal 2020, when the company’s COVID-19 vaccine was approved, that the trend reversed into a decline in Adjusted EPS, up 16.0% year over year. Now analysts predict the momentum will accelerate and adjusted EPS will increase 21.4% year over year in the first quarter of fiscal 2021.
Pfizer sales had an even longer period of poor performance, six quarters in a row compared to Q2 2019. In the second quarter of the 2019 financial year, the largest year-on-year decline was recorded at 26.2%. Revenue, along with Adjusted EPS, began growing again in the fourth quarter of fiscal 2020 when it saw 11.8% year-over-year growth. Consensus estimates show that revenue is growing much faster in the first quarter of fiscal 2021, at 35.3% year over year.
|Pfizer Key Stats|
|Estimate for the first quarter of fiscal year 2021||Q1 FY 2020||Q1 FY 2019|
|Adjusted EPS ($)||0.76||0.62||0.85|
|Revenue ($ B)||13.5||10.0||13.1|
|Vaccine Income ($ B)||2.2||0||0|
The key metric
As previously mentioned, investors will closely monitor Pfizer’s COVID-19 vaccine receipts, for which there is minimal historical data to compare. Competitors who have manufactured COVID-19 vaccines including AstraZeneca plc and Johnson & Johnson (JNJ) have encountered production or security issues. As a result, Pfizer’s ability to grow vaccine production and sales could show that there is potential to secure contracts for future shipments of the vaccine. These contracts are negotiated with governments that are likely to prepare for future pandemics by ensuring relationships with one or more suppliers. By establishing itself as a trusted and reliable provider of COVID-19 vaccines, Pfizer could lay the foundation for future stable growth.
Pfizer began rolling out its COVID-19 vaccine in late 2020, and fiscal 2020 fourth quarter results reflected the start of that process. The company reported sales of $ 154.0 million for the vaccine for the quarter. Vaccine sales for the first quarter of fiscal 2021 are projected to be more than 14 times that value at $ 2.2 billion. Analysts currently expect Pfizer vaccine sales to peak at $ 2.4 billion in the second quarter of fiscal 2021, and to peak at $ 1.7 billion in the third quarter and $ 1.8 billion in the fourth quarter will achieve. It is unclear to what extent production problems at AstraZeneca plc and Johnson & Johnson will further increase demand for Pfizer’s COVID-19 vaccine and thus sales.