Pfizer (PFE) stock is yo-yoing as a saga with new activist investor Starboard Value unfolds.
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How Novo Nordisk, Wegovy And Ozempic Are Changing The Weight-Loss Game For Patients And Investors
Starboard reportedly took a $1 billion stake in Pfizer on Oct. 7, causing shares to pop. The investor says it reached out to Ian Read and Frank D’Amelio as part of its due diligence. Read is the former chief executive, while D’Amelio was the company’s chief financial officer.
Read and D’Amelio shared Starboard’s concerns, the investor said in a letter to the board on Oct. 10. But the duo have since flipped their stance, saying they are “fully supportive” of Albert Bourla, the sitting CEO. Read handpicked Bourla as his successor. Starboard, though, says it believes Pfizer pressured Read and D’Amelio into changing their tune on Pfizer’s trajectory.
The most recent development sent Pfizer stock down on Oct. 10.
Pfizer’s struggles are well known to Wall Street.
The company was late to the game in weight-loss treatment and experienced two high-profile failures. Now, it’s at bat with a potential once-daily pill in the hopes of taking on injections from Novo Nordisk (NVO) and Eli Lilly (LLY).
It has also tried rebuilding its pipeline with acquisitions, including the takeovers of Seagen, Arena Pharmaceuticals and Global Blood Therapeutics. But a piece of the $5.4 billion deal unraveled this month after Pfizer pulled its sickle cell drug, Oxbryta, from the market following patient deaths.
So, is Pfizer stock a sell today?
Pfizer Stock Fundamentals
In the June quarter, Pfizer earned an adjusted 60 cents per share on $13.3 billion in sales. Both beat expectations. Earnings declined 11% while sales rose 3% operationally. It was the first quarter since December 2022 that sales increased year over year.
Sales of heart disease treatment Vyndaqel surged 71% to $1.32 billion and easily topped forecasts. Padcev, a cancer drug Pfizer acquired with Seagen, brought in $394 million in sales, coming in above projections for $352.6 million.
Revenue from the Covid vaccine Comirnaty plummeted and missed expectations. But Covid treatment Padcev topped the Street’s call and soared 79%.
For the third quarter, analysts project 59 cents earnings per share and $14.74 billion in sales. Profit would reverse from a year-earlier loss and sales would climb about 11%.
This year, Pfizer expects adjusted earnings of $2.45 to $2.65 a share and $59.5 billion to $62.5 billion in sales. At the midpoints, earnings would surge 39% as sales pop more than 4%.
Obesity Treatments In Focus
Investors have zeroed in on Pfizer’s efforts in obesity treatment. The company says it plans to send danuglipron into additional testing. Danuglipron is a daily pill, compared to leading shots from Novo and Lilly.
But Leerink Partners analyst David Risinger doesn’t expect Pfizer to have effectiveness and safety test results until 2026. Danuglipron is one of three obesity treatment candidates Pfizer has in testing. The company has a similar drug that mimics GLP-1 — a hormone tied to satiety and stomach emptying — and a third with an undisclosed mechanism.
The field for oral weight-loss drugs is becoming increasingly crowded. Roche (RHHBY), Viking Therapeutics (VKTX), Structure Therapeutics (GPCR), AstraZeneca (AZN) and others are all in this space.
Pfizer Stock And Recent News
Outside of obesity treatment, Pfizer recently launched PfizerForAll, a digital platform to help people connect with health care providers for migraine, Covid or flu. It also connects people with vaccines for Covid, flu, respiratory syncytial virus and pneumonia.
The Food and Drug Administration also signed off on updated Covid vaccines from Pfizer and Moderna. These shots aim to block against the KP.2 strain and are recommended for people age 6 months and older. In this arena, it rivals Moderna (MRNA) and Novavax (NVAX).
Technical Analysis: PFE Stock Tops 50-Day Line
Pfizer stock is back above its 50-day moving average, and remains above its 200-day line. Shares are forming a new flat base with a buy point at 31.54, MarketSurge shows.
(Related: Keep tabs on chart patterns by visiting IBD’s MarketSurge.)
Pfizer stock has an IBD Digital Composite Rating of 53 out of a best-possible 99. The CR is a measure of a stock’s fundamental and technical measures. Shares also have a Relative Strength Rating of 47, a measure of 12-month performance.
Is PFE Stock A Sell?
Based on savvy rules of investing, Pfizer stock isn’t a sell. But it also isn’t currently a buy. Shares are still forming a flat base and have yet to break out. Promisingly, shares are now back above their 50-day line.
Pfizer stock still has to prove its fundamental and technical merit. And it will have to do that while facing off with Starboard.
The company is trying to shore up its pipeline to return to the growth it saw at the height of the pandemic. The RSV vaccine and a potential approval in obesity treatment could be key.
To find the best stocks to buy and watch, check out IBD Stock Lists. Make sure to also keep tabs on stocks to buy or sell.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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