when-does-pfizer-report-earnings-1603390073907.jpg
Source: Getty

Can Pfizer’s Q3 Earnings Lift Its Stock Price?

By

Updated

Leading pharmaceutical company Pfizer will likely release its third-quarter earnings next week. The stock has been in the red this year and has underperformed the markets. 

Article continues below advertisement
pfizer-upcoming-q3-earnings-1603391142961.jpg
Source: Pixabay

Pfizer’s Q3 earnings date

Pfizer will likely report its third-quarter earnings on Oct. 27 at 6:45 a.m. ET. The analysts polled by Tikr expect the company to report revenues of $12.3 billion in the third quarter, which is a YoY decline of 3 percent. Pfizer’s revenues have fallen on a yearly basis for the last five consecutive quarters. However, analysts expect the company’s revenues to rise YoY in the fourth quarter.

Article continues below advertisement

During the second-quarter earnings release, Pfizer raised its 2020 revenue forecast by $100 million to $48.6 billion–$50.6 billion. The company also revised its 2020 adjusted EPS guidance from $2.82–$2.92 to $2.85–$2.95. Analysts expect Pfizer to post an adjusted EPS of $0.71 in the third quarter, which is a YoY decline of 5 percent.

Article continues below advertisement

Pfizer stock has underperformed this year

So far, Pfizer stock is down almost 5 percent in 2020. The stock has underperformed the S&P 500. In August, Pfizer was dropped from the Dow Jones Index along with Raytheon Technologies and ExxonMobil. The stock fell after it was booted out of the Dow Jones. 

Article continues below advertisement

Usually, stocks fall after they are excluded from an index. The funds that are indexed to the index have to sell those stocks. However, Pfizer’s underperformance isn't limited to 2020. The stock has underperformed the S&P 500 over the last one, three, five, and ten-year periods.

Pfizer has a healthy dividend yield

While Pfizer stock has underperformed the markets, investors can find some solace in its dividend. The company has announced a total dividend of $1.52 per share in 2020, which means a dividend yield of over 4 percent at the current prices or roughly double the S&P 500’s dividend yield.

Article continues below advertisement

Analysts see upside in Pfizer stock

According to data compiled by CNN, Pfizer has a median target price of $40, which is 7.5 percent above its current prices. Pfizer's highest target price of $53 represents a 42.6 percent upside over the next 12 months. Seven analysts have a buy rating on Pfizer, while 11 have a hold rating.

Pfizer and BioNTech are developing a coronavirus vaccine candidate. However, it wouldn't be prudent to factor in the success of the vaccine right now. Currently, Pfizer stock trades at an NTM PE ratio of 12.9x, which is below its average valuation multiples over the last five years. The valuations multiples look reasonable with the healthy dividend yield. The company's dividend yield attracts investors who crave high dividend-paying stocks.

Advertisement

More From Market Realist