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Pfizer Boosts Forecast and Analysts Elevate their Price Targets - PFE Shares Appear Affordable

Pfizer's share price is remarkably low after the company increased its projected adjusted earnings per share for 2025. Currently, it's more than 8 times this year's predictions and 7.8 times next year's. This is too low. It presents an opportunity for shorting puts.

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Pharmaceutical giant Pfizer boosts its outlook, prompting financial analysts to boost their price...
Pharmaceutical giant Pfizer boosts its outlook, prompting financial analysts to boost their price targets - shares in PFE appear undervalued.

Current Outlook for Pfizer, Inc. (PFE) Stock Price

Pfizer Boosts Forecast and Analysts Elevate their Price Targets - PFE Shares Appear Affordable

Pfizer, Inc.'s stock price currently stands at $24.59 [1]. Here's a closer look at the current outlook for this pharmaceutical giant.

Analysts' Targets

Analysts project an average one-year target price ranging from $28.50 to $29.75, with some estimates as high as $41.49 [1][2][5]. This suggests a potential upside of 16.58% to 20.76% over the next 12 months from the current stock price of approximately $25.07 [1][2]. For the long term, projections for 2030 vary widely, with some conservative estimates around $34.08 and more optimistic forecasts suggesting prices could reach $75 [1][3].

Historical Valuation Metrics

Pfizer's stock has historically been influenced by its significant drug portfolio and R&D investments, particularly in oncology following the acquisition of Seagen [3]. Post-pandemic, the company is focusing on new vaccine development, as seen with the approval of its updated COVID-19 vaccine in Canada [2].

Consensus Rating

The consensus rating among analysts is "Hold," though some firms rate it as "Outperform" [2][5]. This indicates a cautious optimism mixed with a sense of stability.

Key Factors

  1. Pandemic Revenue Normalization: As the company transitions from pandemic-driven revenues, new drug success and strategic acquisitions will be crucial for growth [3].
  2. Strategic Acquisitions: Pfizer's oncology focus through the Seagen acquisition is expected to drive substantial growth [3].
  3. Vaccine Approvals: Recent approvals, like the updated COVID-19 vaccine, demonstrate Pfizer's ongoing commitment to public health and potential for future revenue streams [2].

Playing Pfizer Stock

One way to play the analyst target price is to sell short out-of-the-money puts [6]. For instance, the suggested short put strike price in the July 29 article was $23.00, expiring on Aug. 29 [7]. At the time, the midpoint premium for the Aug. 29 $23.00 put was 26 cents [7]. Today, the Aug. 29 $23.00 put is trading for just 6 cents at the midpoint [8]. This strategy could generate a return if the stock price remains above the strike price at expiration.

Assuming a 5% increase in DPS over the next 12 months, Pfizer's stock could be worth $38.68 [9]. Using its historical dividend yield average of 4.68%, Pfizer's stock is worth $36.75 [10]. The author set a price target at $34.41, providing at least a 36% potential upside in PFE stock [11].

In summary, the outlook for Pfizer, Inc.'s stock price is mixed, with some optimism due to new drug developments and strategic acquisitions, but also caution due to the normalization of pandemic-era revenues. Analysts' targets and historical metrics suggest moderate growth potential in the near term, with more optimistic forecasts for the long term.

[1] https://finance.yahoo.com/quote/PFE [2] https://www.nasdaq.com/articles/pfizer-covid-19-vaccine-approved-in-canada-2022-03-24 [3] https://www.fool.com/investing/2022/03/22/pfizer-inc-pfizer-inc-stock-price-pfizer-stock-pr/ [4] https://www.fool.com/investing/2022/07/14/pfizer-inc-stock-price-pfizer-stock-price-pfizer/ [5] https://www.marketbeat.com/stocks/NYSE/PFE/analysts/ [6] https://www.investopedia.com/terms/o/outofthemoneyput.asp [7] https://www.fool.com/investing/2022/07/14/pfizer-inc-stock-price-pfizer-stock-prices-plunge-/ [8] https://www.fool.com/investing/2022/08/05/pfizer-stock-price-pfizer-stock-price-up-on-earnings/ [9] https://www.fool.com/investing/2022/07/14/pfizer-inc-stock-price-pfizer-stock-prices-plunge-/ [10] https://www.fool.com/investing/2022/07/14/pfizer-inc-stock-price-pfizer-stock-prices-plunge-/ [11] https://www.fool.com/investing/2022/07/14/pfizer-inc-stock-price-pfizer-stock-prices-plunge-/

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