Pfizer (PFE) is set to report Q4 earnings on Tuesday, February 3, before the market opens, with expectations pointing to another challenging quarter.
Wall Street forecasts EPS of $0.57, down 9.5% year over year, on revenue of $16.83B, a 5.4% Y/Y decline, reflecting continued normalization following the pandemic-driven surge.
Despite the softer outlook, Pfizer has a strong track record, beating EPS estimates in every quarter over the past two years and topping revenue estimates 75% of the time during that period.
However, sentiment has weakened heading into the print: over the last three months, EPS estimates have seen 15 downward revisions and no upward revisions, while revenue estimates have faced 11 downward revisions with none higher, signaling lowered expectations and raising the bar for any upside surprise.
PFE shares have risen just 1.2% over the past year, largely underperforming the S&P 500’s nearly 17% gain. The stock has a Buy rating among Wall Street analysts, with an average PT of $28.82 – 8.7% upside.
“Pfizer appears cheap with a near 7% yield, but capital allocation constraints undermine its investment case. Nearly all of PFE’s free cash flow is consumed by dividends, leaving little for buybacks, debt reduction, or R&D reinvestment,” SA analyst Dividendology said.
“Upcoming patent expirations are adding fuel to the fire and will soon lead to $17 billion in lost revenue, leading to negative earnings growth projections from analysts.”