In 2020 the earnings reports of any company cannot be separated from the pandemic; some will have hits and benefits whist most have seen mostly disadvantages. As always, with anything bad that happens, there are some companies that can benefit, so it is important for investors, to put their money in the right basket. Pfizer will publish its second-quarter earnings report before the US market opens later today (July 28).
Pfizer (PFE) in the first quarter reported earnings of $0.80 per share, beating the Zacks Consensus Estimate of $0.77 per share. For Q2, Zacks estimate for Pfizer, the world’s largest pharmaceutical company, is $0.64 per share, which represents a year-over-year change of -20%, and Revenues are expected to be $11.94 billion, down 10% from the same quarter last year.
For the current quarter, it is important to keep two things in mind. First, as it is expected, revenues and EPS will be lower than last year; what is important at the moment is to compare the published results with the estimated, with more emphasis on previous years. On the other hand, as the pandemic is at the center of any estimates, Pfizer as one of the companies which are so close to last stage of human testing of its vaccine has a very good chance to recover all its lost revenues and value. Even if more than one company can create a vaccine, and this is highly likely, the market, has many tens of billions is available to many pharmaceutical companies which means Pfizer, the world’s largest, is in as a good a place as any to benefit.
The company has been in partnership with German biotechnology firm BioNTech and is one of the key developers to be one of the high chances of producing a vaccine. As CNBC reported, two out of four of the companies’ coronavirus vaccine candidates, BNT162b1 and BNT162b2, have been granted the ‘fast track’ designation by the FDA and the US government.
Also, and more importantly, the US government has entered into a deal with the company and its German partner to manufacture 100 million doses of a COVID-19 vaccine for the United States, by December, in a deal estimated to be worth $1.95 billion, which for sure reads as positive news.¹
Technical Overview
Technically, the stock price moves around its daily pivot now. Better than expected results will push the market higher, however even if the results will not be in the favor of investors, following news around the COVID-19vVaccine can lead the market. The first resistance sits at 23rd July High ($39.50), a breach of this level could see second resistance at $41.00 the 2020 high, from January 20. On the flip side, first support sits at the 20 DMA around $36.00.
¹ https://www.nytimes.com/2020/07/22/us/politics/pfizer-coronavirus-vaccine.html
Ahura Chalki
Market Analyst
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