It’s hard to imagine Pfizer (PFE.N), which invented one of the main vaccines that protect against Covid-19, is worth less now than it was before the pandemic. Yet that’s what the pharmaceutical company’s $170 billion market capitalization suggests, with year-long fears about declining vaccine demand coming to fruition in third-quarter results. It’s an over-reaction, even if Pfizer’s Covid therapies were to prove worthless.
Pfizer reported plummeting demand for its Covid vaccines and treatments, with an overall revenue decline of over 40% compared to last year, and a $2.4 billion loss that included a $5.6 billion charge for Covid inventory write-offs. Pfizer now thinks 2023 revenue from shots and pills for the disease will total about $12.5 billion, over a 75% decrease from last year.
That’s more than accounted for in the stock. Pfizer’s non-Covid revenue this year should be around $47 billion and is growing around 7% a year. Peers trade at around 5 times sales, and if Pfizer did too its enterprise value would be about $235 billion. Instead it’s almost 20% less, and the stock is worth one-fifth less than it was at the end of 2019. What’s more, Pfizer has made a string of cashacquisitions totaling about $70 billion since 2020, suggesting the pandemic should have left it stronger, even if its line-up of Covid defenses is getting only weaker. (By Robert Cyran)
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