Why This Pfizer Analyst Is Sidelined After Beat-And-Raise Q1

Pfizer Inc. (NYSE: PFE) reported Tuesday with forecast-beating first-quarter earnings and upwardly revised its fiscal year 2021 earnings and revenue guidance.

Despite the impressive results, an analyst at BofA Securities is staying on the sidelines of the COVID-19 vaccine stock.

The Pfizer Analyst: Geoff Meacham maintained a Neutral rating on Pfizer with a $39 price target.

The Pfizer Takeaways: Pfizer's first-quarter beat came about primarily due to COVID-19 vaccine sales, Meacham said in a Tuesday note.

The revised guidance was not a surprise given the scope of the pandemic, the analyst said. 
The updated guidance, according to BofA, reflects 1.6 billion doses under contract for 2021 as of mid-April.

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Most investors are looking past the near-term results, with the key question in their minds being whether boosters will become the standard-of-care longer term, Meacham said.

This isn't likely to be the case given the effectiveness of mRNA vaccines, the analyst said — the class to which Pfizer's vaccine belongs. 

Pfizer's business outside of COVID-19 was also solid, coming in at $11.1 billion compared to the $10.6-billion consensus, he said. 
"The results bucked the trend across Biopharma this earnings season, where lingering COVID headwinds and typical 1Q seasonality have produced weak 1Q21 results," Meacham said. 

Increased ex-COVID-19 guidance for the remainder of 2021, the analyst said, will likely support shares, despite mixed results from key growth drivers across the portfolio.

BofA expects investors to remain on the sidelines until there is greater certainty that the company can attain its goal of a more than 6% compounded annual revenue growth rate between 2020 and 2025, prior to a key loss of exclusivity in 2026 and ahead.

PFE Price Action: At last check, Pfizer shares were adding 0.56% to $40.06.

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