05 May 2021

Pfizer Tops Q1 Views, Raises Vaccine Forecast

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News shaping
the markets today

     

What’s happening: Shares of Pfizer inches higher on Tuesday, after the pharma major reported its first-quarter results ahead of expectations.

What happened: Pfizer reported strong quarterly results and raised its 2021 guidance for covid-19 vaccine sales by a wide margin.

The company made a number of announcements that could lead to a spike in demand for its covid-19 vaccine.

How were the results: The New York-based company reported strong growth in sales and earnings for the first quarter, with both metrics topping market views.

  • Sales surged 45% year-over-year to $14.6 billion, exceeding the consensus estimate of $13.6 billion.
  • Adjusted earnings climbed 47% to 93 cents per share, convincingly ahead of the Street forecast of 78 cents per share.

Why it matters: Pfizer said that the demand for its covid-19 vaccine from various governments around the world could grow sales significantly in coming years. The company lifted its 2021 forecast for covid-19 vaccine sales by more than 70% to $26 billion, with the delivery of an estimated 1.6 billion doses in the year.

Management said there were plans of filing for the full approval of its vaccine in the US this month, for use among people above 16 years. Currently, the vaccine, which Pfizer developed in collaboration with German partner BioNTech, is authorised for emergency use only.

Pfizer also said it expects the FDA to expand the vaccine’s EUA (emergency use authorisation) for individuals between 12 to 15 years.

Pfizer and BioNTech are gearing up to produce as many as 2.5 billion vaccine doses this year, with plans of signing agreements with several other countries. “Based on what we've seen, we believe that a durable demand for our covid-19 vaccine – similar to that of the flu vaccines – is a likely outcome,” CEO Albert Bourla said.

The pharma major also aims at expanding the use of its vaccine in coming months, with safety and efficacy data for children between 2 to 11 years expected in September. Pfizer continues to work on a new formulation of the vaccine, which would allow it to be stored at standard refrigerator temperatures for up to 10 weeks.

How shares responded: Pfizer’s shares rose 0.3% to close at $39.95 on Tuesday, following the release of quarterly results. The stock has climbed more than 14% over the past three months.

What to watch: Markets will monitor Pfizer’s talks with various governments for purchasing its covid-19 vaccine as well as the revenue generation from the vaccine in the upcoming quarters. Investors will continue to keep an eye on the company’s R&D spending.

The Markets Today

     

US stocks will be in focus today, ahead of a basket of economic reports from the country.

Context: Wall Street closed mostly lower on Tuesday, with investors offloading tech and other high-growth stocks.

Details: The retreat in equities yesterday followed sharp gains for the Dow Jones index on Monday, with investors buying stocks of companies that are expected to benefit more from the reopening of the economy. The 30-stock index had added more than 200 points on Monday.

“We have gone through a two to three week period that has seen really good news get little or no reaction in markets,” National Securities analyst Art Hogan said in a note. “Investors get uneasy at new highs, and there have been 25 new highs for the S&P 500 so far this year,” he added.

Markets came under pressure on Tuesday after US Treasury Secretary Janet Yellen suggested hiking interest rates to prevent the economy from overheating. Investors were also concerned about rising inflation, prospects for tax hikes by the Biden administration and fears of the Fed easing its monetary stimulus earlier than expected.

The Dow Jones rose 0.06% to close at 34,133.03 on Tuesday, after tumbling more than 300 points earlier in the session. The S&P 500 fell 0.67% to 4,164.66, while the Nasdaq 100 shed 1.85% to close at 13,544.67, with shares of big techs, including Apple, Google-parent Alphabet and Facebook, trading lower.

What to watch: Investors await economic data on ADP employment change and services PMI from the US. Private businesses in the US are expected to hire 800,000 workers in April, following an addition of 517,000 workers in March. The IHS Markit services PMI is projected to jump to 63.1 in April, while the ISM services PMI is expected to improve to 64.3.

Rising covid-19 cases remain a top concern for markets, with total infections surpassing 32.5 million in the US.

Other Markets: European trading indices closed lower on Tuesday, with the FTSE 100, German DAX 30, French 40 and STOXX Europe 600 down by 0.67%, 2.49%, 0.89% and 1.43%, respectively.

Support & Resistances
for Today

     

market snapshot

     

Futures at 0400 (GMT)

What else to watch today

     

Spain’s unemployment change and consumer confidence, South Africa’s IHS Markit PMI, Italy’s services PMI and composite PMI, France’s services PMI and composite PMI, Germany’s services PMI and composite PMI, Eurozone’ services PMI and composite PMI, UK’s new car registrations, Brazil’s industrial production, services PMI and composite PMI as well as America’s MBA mortgage applications, composite PMI, ISM New York index and EIA’s crude oil inventories.

 

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