Have you had a chance to take a look at Pfizer stocks? Despite encountering some challenges, the company appears to have the potential for a resurgent performance. Is Pfizer a good stock to buy?
At the moment, the stock is being traded at an appealing valuation, and it offers a solid 5.7% dividend yield. Furthermore, Pfizer is actively pursuing the development of a new weight loss drug candidate, which presents an intriguing potential catalyst for the company.
Analysts are projecting a possible 17.1% increase in stock value over the next year. These factors indicate that there may be exciting investment opportunities to explore with Pfizer.
Cheap stock with great dividends
Pfizer’s stock is trading at only 12 times the estimated earnings for 2024, which is less than half of what the broader market is valued at, sitting around 24.2 times earnings.
The recent drop in Pfizer’s stock price is largely due to decreased revenue from its COVID-related activities as the pandemic becomes less of a pressing issue. However, there are several other promising factors that suggest brighter days ahead for Pfizer stocks.
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On top of its appealing valuation, Pfizer boasts a hefty dividend yield of 5.7%, which is pretty rare for a well-established blue-chip stock outside of sectors like REITs, finance, energy, or tobacco. Actually, Pfizer’s yield of 5.7% puts it among the highest dividend payers in the S&P 500 at the moment.
And it’s not just about the high yield—Pfizer has a solid track record as a dividend champ. The company has been consistently paying dividends for 34 years straight, and it’s been increasing its dividend payout for the past 13 years without fail. That’s some serious commitment to rewarding its shareholders over the long haul.
Pfizer stocks nears the Golden Cross
Pfizer’s stocks are approaching what’s known as a “Golden Cross,” a key signal in technical analysis that often points to more potential gains ahead for investors.
Right now, Pfizer’s share price is riding above its 5-day, 20-day, and 50-day moving averages, signaling a strong uptrend. Specifically, PFE stock is trading above its 8-day SMA at $29.04, the 20-day SMA at $28.35, and the 50-day SMA at $28.37, all pointing towards bullish momentum.
Looking forward, Pfizer seems poised to surpass its financial forecasts, fueled by increased demand for products like Comirnaty and Paxlovid, as well as strong performances from its recent oncology acquisitions from Seagen.
Analysts are optimistic, predicting growth of up to 30% in Pfizer’s oncology and vaccine sales, aligning with Pfizer’s ambitious target to achieve an additional $25 billion in revenue by 2030 through strategic expansion and innovation.
Pfizer to focus on the weight loss market
Investing in cheap stocks with juicy dividend yields can be enticing, but it often takes a catalyst to really propel those stocks forward.
Luckily for Pfizer, it seems to have found just that. Recently, Pfizer’s CEO revealed plans for three new weight loss drugs. One of these, danuglipron, a promising once-daily oral medication, has shown strong potential in early pharmacokinetic studies. Pfizer is gearing up to launch further studies testing various doses of the drug in the latter part of this year.
It’s important to manage expectations though—getting a drug approved and onto the market is a long road. Still, this development is exciting news.
Just look at Eli Lilly and Novo Nordisk. Their shares soared in the past year thanks to their successful weight loss drugs, Zepbound and Ozempic, leaving Pfizer behind with a 20.5% decline. Eli Lilly and Novo Nordisk trade at much higher multiples (68.3 and 41.4 times 2024 earnings estimates, respectively) compared to Pfizer’s modest 12 times estimate.
Now, Pfizer might not reach those lofty valuation levels anytime soon, but if their weight loss drug proves effective, there’s certainly potential for the stock to get a boost. The convenience of a once-a-day pill could appeal to patients who prefer it over injections like Zepbound and Ozempic.
These weight loss drugs, known as GLP-1 agonists, represent a massive market opportunity projected to exceed $100 billion annually by 2030. That’s a lot of room for growth and potential winners.
Should you buy Pfizer stocks?
Pfizer has had a rough year, but analysts are feeling optimistic about this stock because the recent slump means an opportunity for a big discount compared to the broader market. Plus, with a solid 5.7% yield, it’s a tempting pick for income investors.
There’s also some exciting potential brewing with Pfizer’s new once-daily weight loss drug. It’s still early days, and success isn’t guaranteed, but progress here could spark renewed interest in Pfizer and push its stock price higher.
Looking at what analysts are saying, Wall Street gives Pfizer a Moderate Buy consensus rating. Over the past three months, analysts have issued seven Buy ratings, eight Holds, and zero Sells. The average price target of $33.83 suggests there’s about 17.1% upside potential from where it’s currently trading.
Weight loss drugs boosted Eli Lilly and Novo Nordisk’s stocks. Even a hint of success in this arena could really pay off for Pfizer stocks at these bargain levels.
Information in this post is for general informational purposes only. It cannot and should not be considered as suggestions or recommendations regarding investing or financial decisions.
