Pfizer Inc. Downgraded to Market Perform Amidst Concerns Over Patent Expirations and Management Confidence
- Wednesday, October 16, 2024
Pfizer Inc. (PFE) shares have been downgraded to market perform from outperform by analysts at TD Cowen due to upcoming patent expirations and shaky confidence in the drugmaker's management. Despite experiencing a significant drop of over 40% in 2023, the analysts believe it is difficult to remain highly optimistic about the stock even at its current levels. They highlight that while Pfizer is expected to demonstrate strong earnings growth until 2026, the longer-term outlook is hampered by the anticipated loss of market exclusivity for key drugs such as the blood thinner Eliquis and breast cancer treatment Ibrance.
Furthermore, the analysts express reservations about Pfizer's management, remarking that their confidence in the company's leadership is not the highest. They mention that Pfizer's recent guidance has often proven overly optimistic, calling into question their decisions to divest assets through Roivant Sciences Ltd. (ROIV) and Cerevel Therapeutics Holdings Inc. (CERE). The analysts believe that these divestments may not align with the values placed on those assets by competitors.
As a result of these concerns, Pfizer shares fell by 0.2% premarket on Thursday and have declined by 40.7% over the past 12 months. In comparison, the S&P 500 (SPX) has experienced a gain of 22%.
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