February 1, 2023

Pfizer Stock Looks Pricey, but Really is a Great Deal

Pfizer (PFE) develops, manufactures, and sells pharmaceutical products worldwide. I am bullish on the stock.

In the financial markets, prices can be deceiving. PFE stock is a textbook example of how an asset can rise to the occasion, but still not truly be expensive.

In 2021, Pfizer stock ran from $36 to $59 for a very healthy gain. Yet, with a trailing 12-month price-to-earnings (P/E) ratio of just 17.5, Pfizer is really a rare bargain in the markets.

Still, you don’t have to buy PFE stock just based on the company’s valuation. There are other developments that should persuade the skeptics to get behind Pfizer in the era of COVID-19.

Big Decision Coming

Of course, Pfizer is well-known as a significant provider of COVID-19 vaccine shots. Consequently, announcements from the U.S. Food and Drug Administration (FDA) are extremely important for PFE stockholders.

One such announcement is expected to happen soon, actually. This will concern the possible U.S. approval of COVID-19 booster shots for 12- to 15-year-olds.

Rochelle Walensky, director of the Centers for Disease Control and Prevention, recently stated that the FDA was analyzing whether it was safe and necessary for youths in that age group to receive a third dose of the COVID-19 vaccine.

As you might expect, Pfizer is ready and waiting with its version of this vaccine shot. The company already has currently holds an emergency use authorization (EUA) for its COVID-19 booster shots for people 16 years or older in the U.S.

Thus, the company stated that it’s “confident regulators are making every effort to look for ways to preserve a high level of protection against the virus across broad populations.”

Progress in the U.K.

Turning to Europe now, Pfizer and its stakeholders are undoubtedly celebrating a major win in the United Kingdom.

Specifically, U.K. authorities just approved Pfizer’s oral antiviral drug, known as Paxlovid, for COVID-19.

It’s not an all-encompassing approval, mind you. Reportedly, the U.K. Medicines and Healthcare products Regulatory Agency’s approval of Paxlovid applies to people with mild to moderate COVID-19 who have at least one risk factor for developing severe illness.

Still, this is a huge step forward for the company. The regulatory agency was also quoted as saying that that Paxlovid is very effective when taken during the initial stages of the viral infection.

Medicines and Healthcare products Regulatory Agency Chief Executive June Raine offered a particularly encouraging statement regarding Pfizer’s orally administered COVID-19 vaccine.

“I hope the announcement gives reassurance to those particularly vulnerable to Covid-19, for whom this treatment has been approved. For these individuals, this treatment could be life-saving,” Raine asserted.

Wall Street’s Take

According to TipRanks’ analyst rating consensus, PFE is a Moderate Buy, based on seven Buy and 11 Hold ratings. The average Pfizer price target is $56.12, implying 5% downside potential.

The Takeaway

The analysts might generally consider PFE stock to be a Moderate Buy, but investors can choose to focus on Pfizer’s positive catalysts as the company diligently works to combat COVID-19.

We can already discern progress on this front in the U.K. recently, and possibly in the U.S. as well in the near future.

All in all, you don’t have to view PFE stock as expensive. An argument could actually be made that it’s super-cheap and a must-own for value-focused healthcare-sector investors everywhere.

Disclosure: At the time of publication, David Moadel did not have a position in any of the securities mentioned in this article.

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