Pfizer (PFE) to Report Q3 Earnings: What's in the Cards?

Zacks Equity Research
·4-min read

Pfizer, Inc. (PFE) will report third-quarter 2020 results on Oct 27, before market open. In the last reported quarter, the company delivered an earnings surprise of 21.88%.

The drug giant’s performance has been mixed with the company exceeding earnings expectations in three of the last four quarters while missing in one. The company has a four-quarter earnings surprise of 12.53%, on average.

Pfizer Inc. Price and EPS Surprise
Pfizer Inc. Price and EPS Surprise

Pfizer’s stock has declined 3.5% this year so far compared with a decrease of 1.2% for the industry.

Factors to Consider

Higher sales of Pfizer’s key brands, Eliquis, Ibrance and Inlyta, in the Biopharma segment, and higher biosimilar revenues are likely to have made up for lower sales in the Upjohn group in the third quarter.

In the Biopharma segment, trends of patient visit to doctors, vaccinations and elective surgical procedures are likely to have improved in the third quarter from the second-quarter levels. This means that new prescription trends for certain key medicines are likely to have picked up in the third quarter after declining in the second quarter.

Within the Biopharma group, the Zacks Consensus Estimate for oncology and vaccine products is $2.78 billion and $1.9 billion, respectively. The Zacks Consensus Estimate for the Upjohn group is $1.91 billion.

However, sales of some key drugs like Prevnar 13/Prevenar 13 in the United States, Chantix in the United States and Enbrel in international declined in the second quarter. It remains to be seen if sales improved in the third quarter when the company reports.

Meanwhile, Pfizer’s sterile injectables portfolio is likely to have benefited from increasing demand due to the COVID-19 pandemic. Pfizer believes its anti-infective medicines as well as other sterile injectable products are utilized in the incubation and ongoing treatment of mechanically ventilated COVID-19 patients.

In the Upjohn segment, sales of key drug Lyrica are likely to have declined due to multi-source generic competition that began in July 2019. Meanwhile, higher sales of Lipitor and Norvasc might have led to increased sales in China.

Key Recent Development

In early October, Pfizer and its Germany-based partner BioNTech BNTX began rolling submission of their mRNA-based coronavirus vaccine candidate, BNT162b2 to the European Medicines Agency (EMA). The EMA accepted rolling review on the candidate based on available preclinical and clinical data. As part of the rolling review process, the EMA’s Committee for Medicinal Products for Human Use has begun evaluating the pre-clinical data. After the rolling review process is complete, the final/formal marketing application will be filed once the EMA is satisfied that the submitted data are adequate and demonstrates the vaccine’s efficacy and safety.

Pfizer and BioNTech selected BNT162b2, out of four mRNA-based coronavirus vaccine candidates, for late-stage development as it demonstrated better results in early-stage studies. They began global phase III development in July. BioNTech and Pfizer expect to file regulatory applications for BNT162b2 in the United States in October/November. Eventually, if the vaccine is approved, Pfizer/BioNTech plan to manufacture up to 100 million doses by the end of this year and potentially more than 1.3 billion doses by the end of 2021.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Pfizer this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.

Earnings ESP: Earnings ESP is 0.00%, as the Most Accurate Estimate as well as the Zacks Consensus Estimate stands at 70 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Pfizer has a Zacks Rank #3.

Stocks to Consider

Here are some large drug/biotech stocks that have the right combination of elements to beat on earnings this time around:

GlaxoSmithKline GSK has an Earnings ESP of +7.23% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Merck MRK has an Earnings ESP of +2.60% and a Zacks Rank #3.

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Click to get this free report Pfizer Inc. (PFE) : Free Stock Analysis Report Merck Co., Inc. (MRK) : Free Stock Analysis Report GlaxoSmithKline plc (GSK) : Free Stock Analysis Report BioNTech SE Sponsored ADR (BNTX) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research