Pfizer stock can outperform even in a 'trough COVID' scenario says Goldman Sachs

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By Sam Boughedda

Pfizer (NYSE:PFE) management presented at an investor conference yesterday and Chief Executive Albert Bourla is said to have reiterated plans for shaping Pfizer post-COVID.

Following the Pfizer presentation, Credit Suisse analysts told investors in a note that Pfizer focused on the non-COVID side of the business.

"For the non-COVID sales, Dr. Bourla reiterated its 2020-25 mid-term guide of +6% and also first-time longer-term 2025-30 guidance of 6-10%, which comes in ahead of consensus expectations," wrote the analysts, who maintained an Outperform rating and $55 price target on Pfizer. "For COVID, the CEO highlighted it will remain a large part of Pfizer's revenues, and sales will step up post-2023 as commercial pricing is introduced, and ultilisation increases from new Flu/COVID combinations."

JPMorgan analysts kept a Neutral rating on the stock, stating that with Pfizer's "expenses also expected to ramp in 2023, we would not be surprised to see shares range bound as the Street looks to better understand near-term core vs COVID sales/earnings dynamics."

"At the same time, we believe PFE's biz dev efforts in 2022 were a step in the right direction in terms of giving the market clarity on the company's longer-term growth prospects and further progress on this front would likely be well received," added the analysts.

Furthermore, Goldman Sachs analysts said Pfizer "appeared to acknowledge that larger biotech transactions (i.e. larger than the deals they did in 2022) would likely be a part of their M&A strategy over the course of the decade in order to hit their 2030 target of $25bn in revenues from business development."

They added that Goldman sees both the broader pipeline and capital allocation flexibility "offering significant optionality, and believe the stock can outperform even in a 'trough COVID' scenario."

Finally, BMO Capital told investors in a note: "Commentary on COVID revs were balanced, reflecting an expectation of uncertain but non-zero revs in the near future. Key topics included 1) growing revs via internal and external means; 2) overcoming lost revs from LOEs and COVID; and 3) pipeline assets and growth drivers that deserve emphasis."