Wall Street is underestimating vaccine maker Pfizer, which is primed for massive growth ahead as its Covid treatments will remain relevant for years—not to mention generate billions of dollars of revenue for the company, according to analysts at Wells Fargo.
Wells Fargo recently initiated coverage of Pfizer with a “buy” rating and price target of $60 per share, implying an upside of around 16% from current levels.
Wells Fargo analyst Mohit Bansal believes that Pfizer’s Covid treatments will generate major revenue for the company in the “foreseeable future” as new booster shots will be needed to deal with waning immunity and new variants.
Pfizer’s vaccine business alone could generate over $5 billion per year in revenue, the firm predicts, as Covid vaccines “will likely become an annual occurrence.”
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—with the potential to generate nearly $18 billion worth of sales next year, Bonsal says.
Pfizer CEO Albert Bourla said earlier this week that full data on the antiviral treatment will be submitted to the Food and Drug Administration soon, with preliminary studies showing that Paxlovid reduces Covid hospitalizations and deaths by 89%.
Pfizer’s stock rose more than 2% to around $52 per share on Thursday and is now up more than 42% so far this year, outperforming the benchmark S&P 500 Index’s 26% gain.
Shares of rival vaccine makers like Moderna and BioNTech have outpaced Pfizer in 2021, however, with their stocks surging 171% and 258%, respectively.
“We think the Street is underestimating Pfizer’s potential to dominate the Covid market for years to come,” Wells Fargo analysts said. They remain bullish on the company’s core business overall, with “pipeline progress as a matter of ‘when and not if.’”
Despite the emergence of the new Covid omicron variant, initial concerns have abated amid news that vaccines are effective against it. The nation’s top infectious disease expert, Dr Anthony Fauci, said recently initial data was “encouraging,” while other reports showed that the new variant causes milder symptoms than feared. Pfizer and BioNTech both said earlier this week that they are continuing work on omicron-specific vaccines, though three doses of existing vaccines are also effective in neutralizing the variant.
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