Pfizer Triggers $28 Billion Stock Plunge After Warning Covid Vaccine Sales May Disappoint This Year

Topline

Despite skyrocketing revenue from the sale of Covid-19 vaccines, shares of Pfizer plunged Tuesday morning after the pharmaceutical giant issued worse-than-expected revenue guidance for this year, triggering a widespread plunge among vaccine stocks that have struggled to meet analyst expectations as the pandemic begins to wane. 

Key Facts

Pfizer shares fell more than 6% to $50 Tuesday morning, wiping out $19 billion in market value following an earnings report that beat analyst expectations with $3.4 billion in fourth-quarter profit (up fourfold year over year), but fell short of revenue projections, pulling in $23.8 billion, compared to average expectations calling for $24.1 billion.

In a Tuesday morning email, analyst Adam Crisafulli of Vital Knowledge Media pointed out the “underwhelming” report also issued worse-than-expected guidance for sales of Covid-19 vaccines, which made up 53% of the firm’s fourth-quarter revenue, with Pfizer now calling for $52 billion in revenue from the shots this year, compared to expectations of $58 billion.

Other Covid vaccine makers also fell sharply after the report, with shares of Pfizer partner Bio-N-Tech and competitor Moderna, which itself has struggled from disappointing projections, plunging 9% and 7%, respectively, erasing nearly $9 billion in combined market value.

Despite the plunge, Pfizer CEO Adam Bourla praised the firm’s “watershed” results during a Tuesday morning earnings call and pointed out expected overall revenue of about $100 billion next year would be a record high for the 173-year-old company.

Bourla also placed emphasis on Pfizer’s growing business outside of Covid-19 vaccines, touting a record-high 13 clinical studies for new drugs last year and research and development investments that swelled from $8.9 billion to $10.5 billion.

Key Background

Covid-19 vaccines have proven to be highly effective in preventing serious illness and the market’s best defense against the virus—making them a massive boon to a slew of businesses heading up their development. However, shares of vaccine makers have struggled in recent months as critics increasingly question whether or not sales of Covid-19 vaccines will prove a viable revenue stream in years to come. Last month, Moderna cratered as analysts said “overly high expectations” set last year, when Covid-19 vaccines became widely available to the public, will “lead to challenges as people digest” what’s next for the firm beyond Covid vaccines. Its shares are down 70% from an all-time high in August and 37% this year. Pfizer and BioNTech have plunged 11% and 32% this year. 

Tangent

Beyond Covid-19 vaccines, Pfizer’s growing suite of products have helped it earn high marks on Wall Street. Wells Fargo recently initiated Pfizer coverage with a “buy” rating and $60 price target, implying an upside of around 20% from current levels. The vaccine maker’s new oral antiviral pill, Paxlovid, “provides another avenue for Covid-related growth” and will be a “game changer” for the company’s profits, the analysts said. On Tuesday, Pfizer said it expects the antiviral pill will generate $22 billion in sales this year. 

What To Watch For

Moderna is slated to report fourth-quarter earnings on February 24. Analysts expect the Massachusetts-based firm, whose only commercialized product is its Covid-19 vaccine, will report $6.8 billion in revenue, up 1,090% from one year prior. 

Further Reading

Moderna Stock Crash Intensifies: Losses Top $130 Billion (Forbes)

Pfizer Covid Vaccine For Kids Under 5 Could Be Authorized In The Next Month, Fauci Says (Forbes)

This Vaccine Maker Can ‘Dominate’ The Covid Market For Years To Come, Wells Fargo Predicts (Forbes)