Pfizer stock forecast: can the momentum continue in 2022?

Pfizer entered 2021 as one of the most talked about companies on Wall Street and Main Street. The pharmaceutical and biotechnology behemoth concluded Phase 3 trials of its Covid-19 vaccine on 18 November 2020. Within a month, it was authorised for emergency use by the US Food and Drug Administration (FDA).

One could assume that this milestone supported an immediate boost to the Pfizer share price forecast in 2021, but this was not the case. Pfizer’s stock was trading near $40 a share in December 2020, but had fallen to below $35 a share in early 2021.the  low point for Pfizer stock in 2021. Shares picked up over the coming months. During the summer, shares tested the $50 level, but the stock failed to hold the momentum. By October, Pfizer’s stock was down around 20% from the $40 level. It then moved higher.

The stock’s bull run may be attributed to encouraging third-quarter earnings results in early November. And there’s its Covid-19 pill, which is highly effective at reducing the risk of hospitalisation or death among vulnerable people. Also, a newly discovered Covid-19 variant has helped lift Pfizer’s stock in recent days.

Let’s take a closer look at Pfizer stock news and latest developments, and analyse the impact it could have on the stock in 2022, 2023 and beyond.

Pfizer Q3 earnings: setting the tone for 2022

Pfizer reported a 134% year-over-year increase in third quarter revenue at $24.1bn, while adjusted earnings were up 133% from the prior year at $7.7bn. As expected, this strength was due to strong sales from its Covid-19 vaccine. This prompted management to lift its full-year 2021 revenue guidance from $80bn to a range of $81bn to $82bn.

SVB Leerink analyst Geoffrey Porges's latest PFE stock analysis assumes revenue of $100bn in 2022. 

Should investors have faith in this outlook? 

Albert Bourla, Pfizer’s CEO, said during an interview with Bloomberg Television that the company is busy negotiating “way more” deals to supply lower-income companies with a consistent supply of vaccines. The company is in a strong position to fulfill demand, regardless of how large it may be. The CEO said:

“Quantity will not be a problem. If people place orders now, we will honor them.” 

Pfizer address new Omicron variant

Heading into the final trading weeks of 2021, a new Covid-19 variant gave investors reason to lift their Pfizer stock predictions. Bourla said within days of the discovery of the Omicron variant that the company’s new Covid-19 treatment pill looked to be effective against it.

Speaking at another media appearance in late November, the CEO said he had a “very high level of confidence” that the oral treatment’s effectiveness won’t be reduced by the new variant. In fact, he said, the pill was “designed with that in mind”.

Speaking about vaccines, the company’s scientific team is in a position to alter its vaccine formula and introduce an updated jab to specifically address the Omicron variant. According to a 28 November update from the World Health Oganisatioosn (WHO): “It is not yet clear whether Omicron is more transmissible (e.g., more easily spread from person to person) compared to other variants, including Delta… It is not yet clear whether infection with Omicron causes more severe disease compared to infections with other variants, including Delta.”

Alethia Young, Cantor Fitzgerald’s senior biotech analyst, said the new variant may signal that Pfizer is operating an “evergreen business”. She said that the public might well wish for the disease to “go away tomorrow”, but the reality is that companies like Pfizer will have to continue innovating and dealing with it.

At some point, the analyst said, the virus will downgrade in severity and act more like the flu. But even in this scenario, the world will still require treatments for many years and in a “significant way”.

This might bode well for the Pfizer outlook. The world is eager to return to normal, and the availability of effective medical treatments could ease concerns. Taking a look at the PFE stock chart suggests that investors are buying into this narrative.

Pfizer’s stock is hovering around the 52-week high of $55, as of 2 December 2021, which is 54% up since the start of the year.

A brief technical analysis shows that the stock could receive downward pressure from the market. The relative strength index (RSI) is at 73 on 2 December, indicating the stock is overbought.

In case of a correction, the major support level could be at $50, the PFE 20-day moving average. But, investor sentiment can shift rapidly in response to PFE news.

Pfizer stock forecast: what Wall Street analysts think

Is Pfizer stock a ‘buy’, ‘sell’ or ‘hold’? Currently, 23 Wall Street analysts provide Pfizer stock projections. According to The Wall Street Journal (as of 2 December 2021), seven analysts recommend a ‘buy’, 15 rate it a ‘hold’ and one gives Pfizer an ‘underweight’ rating.

This represents an improvement in sentiment from three months ago, when only four analysts shared a bullish rating. 

As of 2 December, the average Pfizer (PFE) stock price forecast among the 23 analysts stands at $50.71. At the current price of $54.68 (2 December), this implies a downside potential of 7%.

However, Wall Street analysts are constantly updating and revising their Pfizer stock projections. According to analyst sentiment compiled by MarketBeat, the highest analyst price target is $60, while the lowest is $41.

On 29 November, Morgan Stanley’s Matthew Harrison raised the Pfizer price target from $50 to $60 and upgraded its rating from ‘sell’ to ‘equal weight’.

Back in early May, Mizuho Securities analyst Vamil Divan downgraded the stock to ‘neutral’, with a $42 price target. The analyst cautioned investors that recent momentum could “make meaningful upside more challenging”. Although the analyst upgraded his price target to $43, he kept the rating as ‘neutral’, as of 30 July 2021.

Commenting on projected Pfizer stock price value, Capital.com’s analyst Mikhail Karkhalev said:

“The pandemic has made pharmaceutical stocks, like Pfizer, the most attractive stocks for short- and medium-term investments. Until the pandemic is over, pharmaceutical companies will continue to make money, receive government contracts, grants and investments. As soon as the situation gets less tough, pharmaceutical companies' stocks will go down.

“Pfizer's covid vaccine is considered one of the most effective in the world, and it’s novel oral Covid-19 oral treatment has shown to be more effective than its rival, Merck. 

“A plausible scenario in the current environment where PFE shares have risen strongly, might be to wait for a correction and buy the dip.”

According to the algorithmic forecasts of Wallet Investor, PFE stock could trade at $54 over the next 12 months. It’s considered a “bad long-term (one-year) investment”.

The service predicts that Pfizer stock could move slightly down to $53.614 by the end of December 2022, trade at $53.937 by the end of 2023 and be at $54.285 by the end of 2024.

The stock could rise to $54.633 by December 2025 and hit $55.424 by December 2026.

When looking for Pfizer stock predictions, it’s important to bear in mind that analysts’ forecasts can be wrong. Analysts’ projections are based on making a fundamental and technical study of the stock’s performance. Past performance is no guarantee of future results.

It’s important to do your own research. Always remember that your decision to trade depends on your attitude to risk, your expertise in the market, the spread of your investment portfolio and how comfortable you feel about losing money. And you should never invest more than you can afford to lose.

FAQ Read more: Palatin Technologies (PTN) stock forecast: A sleeping pharma giant?

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