Pfizer Inc. (NYSE:PFE) finally saw a slight correction in the rally that had started with April 1. The last week began on a good note but as weekend approached, a majority of the gains made earlier in the week were wiped out. However, in terms of outperforming some other sectors, the stock has done particularly well so far in CY2016. Whether you look at today’s trading session, the last 5 sessions, the last one month or even the last 3 months, each such interval has resulted in the stock price going up.
Pfizer Inc. is Set to Break its 52-week High
During the past one year, the stock has been slightly volatile, keeping its movement between $28.25 and $36.46. However, most analysts do not see the 52-week high as a strong resistance level.
As per research conducted by Beta Systems, Pfizer currently has an average rating of 3.93. This is on a 5-point scale where 1 would mean a strong sell recommendation and a 5 would suggest buying the stock. Out of the 14 ratings that were obtained, 3 rate the stock as a strong buy and 7 rate it as a moderate buy.
On the other hand, Zacks Research came out with a set of 11 target prices for the stock. The lowest estimate stands at $33. This is not only greater than the 52-week low, but also higher than the current level itself. On Thursday itself the stock had achieved this level. The highest estimate stands at $54, which is almost double the 52-week low. In other words, each of the analysts polled have the opinion that the stock can only go upward from current levels. The consensus price target given by them is $38.727. Zacks Research’s 5-point scale is such that a 1 would indicate a strong buy and a 5 would indicate a strong recommendation to sell. On this scale, the analysts have given Pfizer’s stock an average rating of 1.77.
The next earnings report is expected to be out after about 3 weeks. Analysts are of the view that the quarterly EPS will be $0.54, very similar to the actual quarterly EPS that was last declared ($0.53).
Business is Facing Minor Hiccups
After the Deutsche Bank Pharma One-on-One Day that was held last month, Deutsche Bank’s Christopher Mcdonagh had studied the spread between Allergan and Pfizer, whose deal is yet to materialize fully. He had commented on the widening spread on the deal.
As per Mcdonagh, only three factors could have any significant impact on the deal: the actions of the Congress, a ban imposed by Obama and a third notice implemented by the treasury. Factors that would not have much of an impact would be the sell offs in the specialty pharma segment (and their unusually high impact on Allergan’s shares) and a disclosure made by Teva Pharmaceutical Industries Ltd. Teva had said that the complexity involved in the antitrust review process by the FTC will result in the deal getting pushed back to June.
In any case, Mcdonagh does not think that there is a high chance of this affecting the overall outcome. He thinks that the risks stay at the same level as earlier, if not lower. He went on to speculate that the selloffs were likely to be a result of technical factors and not fundamentals.
In a separate development, Pfizer is looking at defending against a possible lawsuit by shareholders about the Celebrex and Bextra drugs. Pfizer has been alleged of providing false information about the risks that are associated with the drugs. Pfizer’s spokeswoman Neha Wadhwa said that the damages claimed are improperly inflated and that the firm will continue to fight the case.