Morgan said:
@Bao
They even raised full-year guidance.
Pfizer is more of a dividend stock than a growth stock. It’s stable, with a P/E ratio similar to a bank’s, and it often takes a major event like a pandemic to make it surge.
Ocean said:
Pfizer is more of a dividend stock than a growth stock. It’s stable, with a P/E ratio similar to a bank’s, and it often takes a major event like a pandemic to make it surge.
Their P/E ratio is at 11, while others in the sector are around 15-16. Bristol-Myers is up at 74, and some don’t even have earnings.
@Morgan
Yeah, I think it’s undervalued too, but it seems like it’ll stay around $27-29 unless something big changes. While waiting for Pfizer’s value to be recognized, you might find better options elsewhere.
@Ocean
Sometimes value stocks bounce back on their own without any major news. Pfizer’s valuation is attractive, especially if interest rates drop.
Could be a few reasons:
- It takes time for news to fully impact the market, especially for big institutional investors.
- The market is busy right now with tech earnings and elections coming up—there’s a lot of noise.
- The positive earnings might have already been priced in.
Maybe the hedge fund that bought up Pfizer stock is now cashing out after seeing the CEO gain more leverage with this earnings beat. They might have been looking for some control over the company, which may now be out of reach.
Pfizer’s known for buying technology rather than innovating it themselves. I’m staying away for now, especially with other companies making big moves in the obesity drug market.
Could be all about COVID and Paxlovid.
It might be a case of ‘buy the rumor, sell the news.’ Sometimes people expect a guidance raise, and if it’s not high enough, they sell.
Rey said:
It might be a case of ‘buy the rumor, sell the news.’ Sometimes people expect a guidance raise, and if it’s not high enough, they sell.
I kept track of analysts’ earnings estimates over the past few months, and this result was at the high end of expectations.
It’s likely just people selling on the news. Same thing happened with SOFI today.
Was there an earnings call? If so, the management might have focused on how COVID-related revenue is unpredictable. Also, Pfizer seems to be trailing behind other companies with promising obesity drugs in development. Competition is fierce.
This question keeps coming up! Stock prices are way more complex than simply ‘earnings good, stock goes up.’ The market has tons of players—some are in for the long haul, some are day traders, some are looking for quick profits. There’s no one rule that explains everything.
To simplify: when more people are selling than buying, the price goes down, and vice versa. But it’s a chaotic system with tons of factors—expectations, time of day, the momentum going into earnings, etc.
‘All models are wrong. Some are useful.’ But if you try to use just one simple model, like ‘earnings up means price up,’ it’ll often lead you astray.
@Vann
There’s a huge difference between an earnings beat and beating expectations.
@Vann
My pet peeve is people being surprised when a stock drops after an earnings run-up. It’s super common for stocks to run up into earnings and then drop, even with a beat. I think a lot of new investors just don’t realize this yet.
@Vann
Great explanation! Thanks for sharing.
Easy answer: Earnings reflect past performance, but stock price looks forward. The drop suggests people don’t think Pfizer will repeat these results.
Honestly, this company’s just for dividends. I’ve held it for a while but don’t expect much more.
All they’ve got going is COVID. Maybe their cancer drug acquisition will pay off, but for now, I’m guessing it’ll keep dropping.