Why Pfizer Shares Are Trading At Yearly Lows?

Pfizer Video 26.02.21.

Pfizer Shares Continue To Move Lower

Shares of Pfizer are currently trying to settle below yearly lows at $33.54 as the stock continues its downside trend which was established at the beginning of the year.

Pfizer stock gained additional downside momentum after the company released its fourth-quarter earnings report in early February. Pfizer’s revenue of $11.7 billion beat analyst estimates, but GAAP earnings of $0.10 per share were below analyst expectations.

Pfizer and BioNTech have recently announced that they would study a booster to their vaccine as the companies want to evaluate the effectiveness of a third dose against evolving variants of the virus. Pfizer’s CEO has also stated that people may have to take COVID-19 vaccines every year, like flu vaccines, which greatly increases the long-term valuation of the coronavirus vaccine market.

What’s Next For Pfizer?

It looks like the market is not ready to buy into the vaccine story despite the continued problems on the coronavirus front and the potential for recurring revenue in case of annual vaccinations.

The company is currently valued at about 11 forward P/E and is yielding more than 4.5% which may attract value seekers and income-oriented investors. At the same time, the recent increase in U.S. Treasury yields may have put additional pressure on stocks like Pfizer which are often used as a substitute to bonds as such stocks offer low volatily and stable dividends.

While vaccine optimism helped to push Pfizer shares to highs at the $43 level at the beginning of December, this optimism evaporated as competition increased while Pfizer’s vaccine requires ultra-cold temperatures for storage. FDA has recently stated that frozen vials of the vaccine can be stored at typical pharmaceutical freezers for up to two weeks, but this news had no positive impact on the stock.

At this point, it looks like Pfizer shares will need additional positive catalysts to get out of the current downside trend. The company’s disappointing fourth-quarter report and rising Treasury yields have put the shares under significant pressure so traders will need significant reasons to change their mind on Pfizer.

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