Wells Fargo downgrades Pfizer stock, citing need for a ‘COVID reset’
Shares of Pfizer are down after Wells Fargo downgraded the stock to Equalweight and lowered its price target from $54 to $50.
Video Transcript
DAVE BRIGGS: Wells Fargo slamming Pfizer with the downgrade from overweight to equal weight over the company's post-COVID future. You can see shares falling up more than 3%. The analyst behind the call seeing Pfizer's efforts as underappreciated by investors, but still believes it needs a reset. Here with more is Yahoo Finance's Anjalee Khemlani. Anj, what's the latest?
ANJALEE KHEMLANI: That's right, Dave. Well, as you know, you mentioned the Wells Fargo downgrade. So let's get that full quote up for you. It is, quote, "We think Pfizer needs a COVID reset before the stock could work again. And we think the company could have an attractive profile as it aspires to grow pretty significantly in the next coming years." Now, really, what's on tap for Pfizer is they are faced with, of course, a rock solid blockbuster with the vaccine and Paxlovid as well.
And moving on from that, as we know, the company needs to move on from COVID. And what does that pipeline look like? They do have some patent cliffs that they're looking at for some of their older blockbusters. But the company has been looking at this for some time. In fact, earlier in May of 2021, CEO Albert Bourla told me, quote, "We do think our stock is undervalued, but we do not worry that investors cannot see it."
So at the time, he was convinced that the company wasn't getting enough credit for its COVID products, but that it could soon. And they've done a lot of stuff in terms of M&A, looking at new products, getting in from the outside. And that's really where the company's focus is. But I want to show you a really interesting chart, which is the operational growth of the company per quarter. This is quarter one of '20, versus-- sorry, quarter four of '20 versus growth without the vaccine.
And if you take a look at what '21 looks like, that's an even more astounding number, 106% with COVID products, negative 2 without. And that's the revenue there. So really an interesting focus for the company. But, you know, Albert Bourla did tell us that he knows that this is the year that they're going to be releasing about 10 products, he hopes. And he spoke last All Markets Summit with Julie Hyman, and here's what he said.
It
ALBERT BOURLA: Is the year that we can prove to the world and can prove to us that we can do multiple launches.
ANJALEE KHEMLANI: So as you can see, company is ready to prove itself. They have been trying to erase this idea that they are a COVID-only company. We'll see how it goes.
DAVE BRIGGS: They were around, pretty successful prior to COVID. It is a reset year, though, of proving time. Anj, thank you so much.
