pfizer (PFE) has been one of the most-watched stocks recently by Zacks.com visitors. Therefore, we recommend considering several factors that can affect a stock's short-term performance.
The drug maker's stock price was -1.3% over the past month. In comparison, the Zacks S&P 500 Composite Index, +4.8% was unchanged. The Zacks Large Cap Pharmaceuticals industry, which includes Pfizer, has gained 6% in this period. The key question here is where the stock is likely to go in the short term.
While media reports and rumors about significant changes in a company's business outlook typically trigger stock price trends and lead to immediate price movements, there are always certain fundamental factors that ultimately drive the buy-and-hold decision. Exists.
Regarding revisions to performance forecasts
At Zacks, we prioritize evaluating changes in company earnings estimates rather than focusing on anything else. This is because we believe that the fair value of a stock is determined by the present value of its future income stream.
Essentially, we study how the sell-side analysts covering a stock are revising their earnings estimates to reflect the impact of the latest business trends. And as a company's earnings expectations rise, so will the fair value of its stock. If the fair value is higher than the current market price, investors will be more willing to buy the stock, causing the price to rise. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Pfizer is expected to post earnings of $0.53 per share for the current quarter, representing a year-over-year change of -56.9%. Over the past 30 days, the Zacks Consensus Estimate has changed -4.4%.
Consensus earnings estimate of $2.22 for the current year represents a +20.7% change from the prior year. Over the past 30 days, this estimate has changed by -0.5%.
Next year's consensus earnings estimate of $2.78 represents a +25.1% change from the earnings Pfizer was expected to report a year ago. Over the past month, the forecast has changed by +0.1%.
The Zacks Rank, a proprietary stock evaluation tool with an impressive, outside-audited track record of impressive results, harnesses the power of earnings estimate revisions to be a more conclusive indicator of a stock's short-term price performance. . The magnitude of the recent change in consensus estimates and three other factors related to earnings expectations have given Pfizer a Zacks Rank of #3 (Hold).
The chart below shows the company's consensus EPS estimate over the next 12 months over time.
12 months EPS
Expected revenue growth rate
There's no question that a company's profit growth is the best indicator of its financial health, but nothing will happen if it doesn't make a profit. It's nearly impossible for a company to expand its bottom line without growing it over the long term. Therefore, it's important to know a company's earnings growth potential.
For Pfizer, the consensus revenue estimate for the current quarter is $14.28 Billion, representing a year-over-year change of -21.9%. Estimates for the current and next fiscal year are $60.01 billion and $62.18 billion, representing changes of +2.6% and +3.6%, respectively.
Last reported results and surprising details
Pfizer reported revenue of $14.25 billion in its last reported quarter. This represents a -41.3% year-over-year change. EPS for the same period was $0.10, compared to $1.14 a year ago.
The reported revenue represents a surprise of -0.8% when compared to the Zacks Consensus Estimate of $14.36 billion. EPS surprise was +152.63%.
The company beat consensus EPS estimates in each of the trailing four quarters. He's the only time the company has exceeded consensus revenue estimates during this period.
evaluation
You cannot make efficient investment decisions without considering stock valuation. To predict a stock's future price performance, it is important to determine whether the current price accurately reflects the intrinsic value of the underlying business and the company's growth prospects.
The present value of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), and the past value of your company Comparing a company to its peers based on these parameters can help you see if it is overvalued, overvalued or undervalued, but how reasonable its stock is You can get a good idea of ​​what
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) categorizes stocks into five groups, ranging from A to F, with A ranging from B to F. B is better than C, and so on), and can help identify whether a stock is overvalued, fairly valued, or temporarily undervalued. Masu.
Pfizer is rated 'A' on this score, indicating that it trades at a discount compared to its industry peers. Click here to see the values ​​of some of the metrics that determined this grade.
conclusion
The facts discussed here, and much of the other information on Zacks.com, may help you decide whether the market buzz surrounding Pfizer is worth paying attention to. However, the company's Zacks Rank #3 suggests it could outperform the broader market in the near term.
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