Pfizer posts a beat and raise; Time to buy the big pharma name?
1min read Pfizer (PFE) reported its Q2 2024 earnings, delivering strong results that exceeded analyst expectations. The company reported an adjusted EPS of $0.60, surpassing the consensus estimate of $0.46. Additionally, revenues rose 2.1% year-over-year to $13.3 billion, beating the forecasted $12.96 billion. These solid results were primarily driven by focused commercial execution and robust performance from non-COVID products.
Pfizer raised its full-year 2024 guidance, now projecting revenues between $59.5 billion and $62.5 billion, up from the previous range of $58.5 billion to $61.5 billion. The company also increased its adjusted EPS guidance to a range of $2.45 to $2.65, up from the prior range of $2.15 to $2.35. This updated guidance reflects the company's strong first-half performance and confidence in its ongoing business strength.
Shares of PFE are trading higher on the news. The stock has rallied approximately 15% since early May as investors are attracted to the value play with shares trading at 12x forward earnings and paying a dividend yield of approximately 5.25%. The solid results and outlook should make this an attractive play for longer-term holders.
The company highlighted its operational revenue growth of 14% year-over-year for non-COVID products, which offset the anticipated decline in COVID revenues. Excluding contributions from Comirnaty and Paxlovid, Pfizer's operational revenue growth underscores its continued focus on commercial execution and strategic priorities.
Pfizer also announced the launch of a manufacturing optimization program aimed at achieving approximately $1.5 billion in cost savings by the end of 2027. This initiative is part of Pfizer's broader strategy to realign its cost base and enhance future margin expansion. The company is on track to deliver at least $4 billion in net cost savings by the end of 2024 from its previously announced cost realignment program.
Despite strong financial performance, Pfizer did not complete any share repurchases to date in 2024 and does not anticipate any share repurchases for the remainder of the fiscal year. As of July 30, 2024, Pfizer's remaining share repurchase authorization stands at $3.3 billion.
CEO Albert Bourla emphasized that this quarter marked Pfizer's first topline revenue growth on a year-over-year basis since Q4 2022, when COVID revenues peaked. The strong performance of non-COVID products in Q2 demonstrates Pfizer's continued focus on commercial execution. With the ongoing cost realignment and manufacturing optimization programs, Pfizer is well-positioned for future growth and margin expansion.
