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Pfizer Shares Slide Despite Upbeat Earnings

The news shaping the markets today

Australia’s consumer sentiment index fell 1.3% to 100.8 points in February. Despite this, the AUD/USD pair gained in forex trading this morning.


Canada recorded a trade deficit of C$0.14 billion in December. This became the first trade gap since May 2021 and was significantly worse than the previous month’s surplus of C$2.47 billion. However, the CAD/USD forex pair remained elevated after the news.


Argentina’s industrial production surged 10.1% in December, following 9.9% growth a month ago, which sent the ARS/USD pair higher in forex trading this morning.


The US reported a widening of its trade gap in goods and services by 27% to a record $859 billion in 2021. The US dollar index slipped 0.12% to 95.52 on Tuesday.


Czech Republic’s retail trade grew 3.3% year-over-year in December, versus 13.0% growth in the prior month. The latest reading missed market expectations of 7.6% growth, exerting pressure on the CZK/USD forex pair this morning.

 

What’s happening: Shares of Pfizer fell on Tuesday, despite the company reporting better-than-expected earnings for its fourth quarter.

What happened: The New York-based company had raised its forecast for covid-19 vaccine sales multiple times last year due to vaccine agreements around the world.

Although Pfizer raised the revenue projections for its covid-19 vaccine for 2022, it missed the high market expectations, which exerted pressure on its stock on Tuesday.

How were the results: The pharma giant reported growth in sales and earnings for the fourth quarter. However, its top-line figure came in below Street estimates.

  • Revenues jumped 105% year-over-year to $23.84 billion but fell short of the consensus estimate $24.20 billion.
  • Adjusted earnings came in at $1.08 per share, versus 43 cents per share in the year-ago quarter. The figure was significantly higher than market expectations of 87 cents per share.

Why it matters: Pfizer has benefited significantly from the sales of its covid-19 vaccine, which it developed in collaboration with Germany’s BioNTech SE. The company reported sales of the vaccine at $36.8 billion for 2021, while sales of its antiviral pill, Paxlovid, came in at $76 million.

Sales of its pneumococcal vaccines, Prevnar 13 and Prevnar 20, fell 25% to $1.3 billion in the quarter.

Pfizer said it expects to manufacture over 4 billion doses of its covid-19 vaccine in 2022, up from last year’s 3 billion doses. The company boosted its vaccine sales forecast yet again, taking it higher by $1 billion to $32 billion for 2022. However, even after the raise, the projection missed market expectations of close to $34 billion.

Management said they expect the combined sales of the covid-19 vaccine and antiviral pill to exceed $54 billion. This, too, missed analyst estimates on average. The pharma company projected the sales for its oral covid-19 antiviral treatment Paxlovid at $22 billion for 2022, versus Street estimates of $22.88 billion.

Pfizer guided to full-year sales between $98 billion and $102 billion, which fell short of market views of $105.5 billion. Management projected adjusted earnings for the year between $6.35 and $6.55 per share.

How shares responded: Pfizer’s shares fell 2.8% to close at $51.70 on Tuesday, following the release of quarterly results. The stock has declined around 8% over the past month.

What to watch: Investors will continue to monitor the spread of Omicron around the world, as this will boost the company’s overall sales this year. The total number of covid-19 cases globally has already exceeded 400 million.

The markets today

Crude oil will be in focus today ahead of the EIA’s data on crude oil stockpiles

 

Context: Crude oil traded lower on Tuesday, settling at its weakest level in almost a week.

Details: Oil prices have been climbing this year due to a number of factors, including a spike in global energy demand, rising geopolitical tensions and a slower-than-planned easing of production cuts by the OPEC+ (Organization of the Petroleum Exporting Countries and its allies).

Crude oil entered the week with some profit taking, after WTI crude climbed to $93.17 on Friday, its highest level since September 2014. Brent crude prices jumped to $94 per barrel on Monday, recording its strongest level since October 2014.

The resumption of indirect talks between the US and Iran, which could boost oil exports from the OPEC producer, also exerted pressure on crude prices. An agreement between the two countries is estimated to increase global oil supply by more than 1%.

Crude prices also responded to the rise in US crude inventories in the latest week. However, the American Petroleum Institute said late Tuesday that crude oil stockpiles in the country had contracted by 2.025 million barrels in the week ending February 4, after a decline of 1.645 million barrels in the prior week.

WTI crude oil for March delivery fell $1.96, or 2.2%, to close at $89.36 per barrel on Tuesday, while Brent futures declined $1.91 to $90.78 per barrel. In other energy trading, wholesale gasoline for March delivery slipped 6 cents to $2.63 a gallon, while March natural gas added 2 cents to close at $4.25 per 1,000 cubic feet on Tuesday.

What to watch: Traders await the release of the EIA’s data on stockpiles of crude oil, gasoline, heating oil and distillates. US crude oil stockpiles, which shrank by 1.046 million barrels in the week ending January 28, is expected to rise by 0.369 million barrels in the latest week.

Other Markets: European trading indices closed mostly higher on Tuesday, with the DAX 40, CAC 40 and STOXX Europe 600 up by 0.24%, 0.27% and 0.01%, respectively, and the FTSE 100 down by 0.08%.

Support & resistances for today

Technical Levels News Sentiment

USD/JPY – 115.37 and 115.50



Negative


EUR/JPY – 131.72 and 131.82


Positive


WTI Crude Oil – 89.41 and 89.62


Positive


Natural Gas – 4.216 and 4.227


Negative


Dow Jones – 35,411.79 and 35,532.45 Negative

 

Market snapshot

What else to watch today

Germany’s balance of trade and current account, Italy’s industrial production, South Africa’s SACCI business confidence index, Brazil’s inflation rate and retail sales, Mexico’s inflation rate, US MBA mortgage applications and wholesale inventories, as well as Russia’s unemployment rate, consumer price index, business confidence, retail sales, real wage growth and gross domestic product.


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