For the fourth quarter of 2020, Pfizer’s (PFE) revenue was higher than the projections of analysts, and adjusted earnings per share dropped short of the expected 12.5 percent to $0.42.
The revenue of the company beat consensus by 1.8 percent, touching $11.68 billion. The figure fell by 3.7 percent relative to the third quarter and declined by 11.8 percent year-on-year.
Full-year 2020 revenues from Pfizer grew by 2% year-on-year to $41.9 billion and adjusted EPS increased by 16% year-on-year to $2.22.
In the reporting period, Pfizer’s oncology business segment led the revenue growth, with a rise of 23 percent year-on-year, powered by Ibrance’s improved revenues (+23 percent year-on-year) due to successful penetration into the CDK and Inlyta segments (+42 percent year-on-year).
Revenue rose by 17 percent year-on-year in the vaccine category. As a result of increased demand in Europe and public procurement in the United States for pediatrics, the blockbuster Prevnar 13/Prevenar 13 continues to demonstrate promising momentum (+11 percent year-on-year). The segment’s revenue growth is also driven by the start of sales of COVID-19’s BNT162b2 vaccine, which produced $154 million in revenue after receiving the EUA in December.
The earnings of its Upjohn subsidiary are no longer included in Pfizer, since it merged with Mylan (MYL) in the fourth quarter to form a separate firm, Viatris (VTRS). Pfizer completed its market focus on the field of biopharmaceuticals with this. These initiatives should contribute, according to the company’s strategy, to an increase in revenue growth and return on equity.
The management of Pfizer has revised its 2021 financial outlook and predicts revenue in the range of $59.4-61.4 billion (+44% YoY) with adjusted EPS in the range of $3.1-3.2 (+42% YoY). The projection recognizes the future contract with an IBT margin of 20 percent for the procurement of the COVID-19 BNT162b2 vaccine with a revenue increase of more than $15 billion.
Although another $5.3 billion is provided for this task, Pfizer does not yet plan to restart its equity repurchase scheme.
We take a favorable view of the Pfizer study, recognizing the positive trends of biopharmaceutical sales and the optimistic outlook for 2021. In the “Market Perform” rating, we lift the target price of PFE shares to $46 and retain the “Buy” recommendation.