When a big pharmaceutical company
reports its results on Tuesday, before the market opens, all eyes will be on the company’s forecast for 2023, and how
expects sales of Covid-19 vaccines to fall this year.
Wall Street analysts expect Pfizer (ticker: PFE) to earn $4.33 per share in 2023, according to FactSet, up from the $6.50 per share they estimate the company earned in 2022. analysts expect Pfizer to earn $1.05 per share in the fourth quarter on sales of $24.4 billion, compared with earnings per share of $1.08 a year ago on sales of 23, $8 billion. The company is hosting an investor call at 10 a.m. Eastern Time.
Johnson & Johnson
(JNJ), the first of Pfizer’s big pharma peers to report earnings this season, guided above Wall Street expectations for 2023, despite warnings issued earlier in the month by
Johnson & Johnson
‘s CEO that the broader economic situation remains uncertain.
For Pfizer, the uncertainties go beyond the broader economy. Like other companies that have seen revenue surge during the pandemic, Pfizer is preparing for a decline in revenue in 2023.
Sales of Covid-19 vaccines and therapeutics are expected to fall sharply this year as the pandemic subsides and the federal government withdraws from the purchase of Covid-19 jabs, paving the way for a commercial market.
Analysts expect Pfizer’s Covid-19 vaccine sales to fall to $14.2 billion in 2023, from an expected $34.1 billion in 2022. The company’s forecast will be released on Tuesday.
Pfizer chief financial officer David Denton told investors in December that the company had a “clear line of sight” to revenue growth of 7% to 9% in 2023, not counting Covid-19 products and the impact of exchange rates. This suggests revenues of $47-48 billion in 2023, not including Covid-19 products; these Covid-19 products, however, remain the biggest source of debate for the stock.
In a sign of continued demand for vaccines, the Food and Drug Administration last week announced plans to move to an annual booster schedule, similar to the annual flu shot schedule. Agency advisers voted to support a proposal to simplify the current vaccination effort by recommending that the same strain composition be used in all doses of Covid-19 vaccine administered in the United States.
Investors also have in mind the approaching patent cliffs; Pfizer said it expects to lose $17 billion in annual revenue by 2030 from expiring patents. The company has hatched a plan to more than make up for those losses through a series of near-term launches and business development.
So far, the market remains skeptical. Pfizer shares trade at 10 times expected earnings over the next 12 months, well below those of peers such as Johnson & Johnson, which trade at 16 times earnings, and
(LLY), which trades at 40 times earnings.
Pfizer stock is down 14% this year and 16.3% over the past 12 months.
Write to Josh Nathan-Kazis at firstname.lastname@example.org