A complete guide to Pfizer stock
Oliver Brett May 10, 2021 3:42 PM
Long before it rolled out the first Covid-19 vaccine, Pfizer had been at the forefront of mass production of medicine across the globe. But what are its strengths and weaknesses going forward? Our guide endeavours to give you the answers.
What does Pfizer do?
Founded by two German immigrants in New York in the middle of the 19th century, Pfizer has grown from its early roots mass-producing citric acid and penicillin to become one of the biggest names in “big pharma”, developing and produces medicines and vaccines for immunology, oncology, cardiology, endocrinology, and neurology.
In November 2020, Pfizer fired the starting gun on the arms race to stock the world with Covid-19 vaccines when announcing that the COVID-19 vaccine it had developed alongside BioNTech and tested on 43,500 people, was found to be 90% effective, with no serious side effects.
On 8 December, UK grandmother Margaret Keenan became the first person in the world to receive the Pfizer Covid-19 jab.
Why are investors interested in Pfizer stock?
Pfizer (NYSE:PFE) stock plays are partly a bet on how popular its Covid-19 vaccines will continue to be even once the worst of the coronavirus pandemic is behind us, and partly a consideration of the company’s long-term status in the world of biotech and pharmaceutical therapy.
In terms of Covid itself, the effect of having first mover advantage has partially worn off but Pfizer also has an impressively broad portfolio of other drugs both in production and development. It needs to. With an employee count approaching 80,000 and research facilities operational worldwide, much of Pfizer’s focus is on establishing a conveyor belt of new medicines in the marketplace.
But the biotech space has never been more competitive, with new companies like Moderna making huge strides, and investors will watch that. They will also watch potential consolidation moves in the industry while being mindful that Pfizer has been involved in costly litigations in the past too. There are many aspects that need to be considered by anyone looking to go long or short in Pfizer stock.
How does Pfizer make money?
Very simply, all big pharma firms like Pfizer make money by charging health providers, whether in the private and public sector, for the medicines it produces. They make a profit when the revenue they collect from selling medicines outweighs their capital expenditure.
In 2020, hurrying to develop a Covid vaccine in record time, many firms announced they were happy to forgo profits in the hunt for a common good. By contrast, Pfizer stood apart from that crowd.
The vaccine brought in $3.5 billion in revenue for Pfizer in the first three months of 2021, nearly a quarter of its total revenue. It was comfortably its biggest source of revenue.
What is Pfizer's business strategy?
Pfizer’s strengths can be summarised as follows:
• A highly skilled workforce through successful internal training programs
• Strong performance in new markets
• Strong free cash flow
• Reliable suppliers
• Successful track record of integrating complimentary firms through mergers and acquisition
• Strong distribution network
• High level of customer satisfaction
• Good returns on capital expenditure
Commentators have also pointed out certain drawbacks:
• Investment in research and development is below some fast-growing rivals
• An imperfect record in demand forecasting
• Marketing inadequacies (not explaining unique selling proposition of its products)
• Requirement to invest more in new technologies
• Gaps in the product range sold by the company (which can provide opportunities to rivals)
Pfizer itself describes its mission thus: “Our goal is to work together for a healthier world and, in doing so, build long-term, sustainable value for our investors. As a route to that goal, we seek to improve access to medicines and health care in ways that improve Pfizer's standing among people and their governments, and open new opportunities for all of us.”
Is Pfizer profitable?
Since 2006, Pfizer has regularly posted gross operating profits in excess of $30 billion a year. In 2010, its profits hit $50 billion before steadily decreasing and dropping below $40 billion in 2015.
How much is Pfizer worth?
Judged on its share price as of May 10, 2021, Pfizer has a market cap value of $220 billion. In the last five years its market cap has fluctuated between $160 and $270 billion.
Who owns Pfizer?
As of May 2021, The Vanguard Group, with a 7.59% stake in Pfizer, is the company’s biggest single stockholder. The Vanguard Group is a US-based investment advisor with around $6 in global assets, and offers brokerage services and financial planning to a wide range of clients. A handful of other similar firms own stock of 1% or more in Pfizer.
Pfizer: Its board of directors
Albert Bourla, a Greek citizen and a doctor of veterinary medicine, is the chairman and CEO of Pfizer. He faced some criticism following the vaccine’s successful trial period when he sold $5.6m of his stake in the company after the share price had risen by 7%.
Alongside him on the board of directors are the following individuals:
• Ronald E. Blaylock
• Susan Desmond-Hellmann, MD, MPH
• Joseph J. Echevarria, MD
• Scott Gottlieb, MD
• Helen H. Hobbs, MD
• Susan Hockfield, Ph. D.
• Dan R. Littman, MD, Ph. D.
• Snatanu Narayen
• Suzanne Nora Johnson
• James Quincey
• James C Smith
What should I know before trading Pfizer stock?
Pfizer trades on the New York Stock Exchange under the ticker symbol PFE. In common with all companies quoted on the NYSE its shares actively change hands between 9.30am and 4.00pm Eastern Time (usually five hours behind the time in the UK), Monday to Friday (excluding nine federal holidays). Pfizer is a component of the S&P 100 and the Russell 1000 indices.
Traditionally, major pharmaceuticals like Pfizer were considered “safe haven” stocks; in other words, they were considered refuges for investors at times of uncertainty. Since the onset of the coronavirus pandemic this notion has changed because pharma companies are now so closely linked with the direct response to the virus itself.
Pfizer tends to show good liquidity, with tight margins. However, risk management strategies are advised when trading Pfizer, because it is a stock that can trade with a degree of volatility.
How to trade Pfizer stock
You can trade stocks with City Index using spread-bets or CFDs, with spreads from 0.1%. Follow these easy steps to start trading now.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.