Tuesday was a fairly eventful news day for U.S. pharmaceutical sector company Pfizer(NYSE: PFE). It reported third-quarter earnings and updated investors about its relationship with an activist investor in its ranks. Neither of these occurrences impressed the market, however, and the company's share price dipped by more than 1%. That was on a day when the S&P 500 index closed in the black, albeit modestly at 0.2%.
Strong growth and twin beats weren't enough for investors
Well before market open, Pfizer unveiled those quarterly results. These showed that the company's revenue was $17.7 billion, for a strong 32% year-over-year improvement when factoring sales of Covid treatment Paxlovid and vaccine Comirnaty. If those two high-profile products are taken out of the calculation, the healthcare giant's top-line growth would have been 14%.
As for earnings, Pfizer's non-GAAP (adjusted) bottom line flipped into the black. The company earned a profit of just over $6 billion, quite a change from the $968 million loss in the year-ago period.
This meant a pair of convincing beats for the company. On average, analysts following Pfizer were expecting less than $15 billion for sales and a mere $0.62 per share in adjusted net income.
What likely overshadowed this for investors was remarks by CEO Albert Bourla on the analyst call discussing the quarter. Addressing criticism by recently arrived activist investor Starboard Value, Bourla said of Pfizer's recent spate of acquisitions that Starboard officials "claim that we wasted money with business development. We have a very different view. We think -- and our board thinks -- that the deals are transformational."
Bullish about the immediate future
Signaling confidence in that strategy and buttressed by those growth figures, Pfizer raised its revenue and profitability guidance for the entirety of 2024. It now feels it will earn $61 billion to $64 billion on the top line and post adjusted earnings of $2.75 to $2.95 per share. Both ranges are up from the previous guidance of $59.5 billion to $62.5 billion and $2.45 to $2.65, respectively.
Should you invest $1,000 in Pfizer right now?
Before you buy stock in Pfizer, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Pfizer wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $861,121!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. TheStock Advisorservice has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of October 28, 2024
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Pfizer. The Motley Fool has a disclosure policy.
