The performance exceeded expectations, yet the stock price fell! Will Pfizer continue to be volatile in a sideways market? (2024.10.30)

Hello everyone, this week's 【Technical Tracking】 will analyze a global pharmaceutical giant — $Pfizer(PFE.US)$ Pfizer announced a third-quarter performance that greatly exceeded market expectations and raised its full-year guidance. It may be puzzling to many why Pfizer's stock closed down over 1% despite the bullish Earnings Reports; what underlying issues might there be?

Hot Events

On October 29, 2024 (Tuesday), Pfizer's third-quarter performance showed that the company's revenue was $17.7 billion, with an adjusted EPS of $1.06, far exceeding market expectations of $14.9 billion in revenue and $0.61 in EPS.

However, such strong performance failed to excite investors. Specifically, the impressive figures were mainly attributed to Covid-19 products, but it is well-known that the market prospects for this product pipeline are very limited; therefore, investors still have significant doubts about Pfizer's future development.

Data shows that Pfizer's research and development of the Covid-19 antiviral oral drug Paxlovid generated $2.7 billion in revenue in the quarter, far exceeding market expectations of $0.56 billion. In contrast, other potentially more promising product pipelines, such as the cancer drug Padcev developed by Seagen, which Pfizer acquired for $41 billion last year, only recorded revenue of $0.409 billion, falling short of market expectations of $0.42 billion.

Overall, Pfizer's performance did not bring unexpected substantial results to investors, and the company still faces external skepticism. Recently, the well-known activist investment fund Starboard Value announced it acquired approximately $1 billion worth of Pfizer stocks and pressured the company's management. In a presentation regarding Pfizer at an investor summit, Starboard discussed Pfizer's market performance, research and development pipeline, and merger investments, accusing the company of inefficient internal research and development, overpaying for external acquisitions, and demanding the board hold management accountable to enhance shareholder returns.

In terms of stock price performance, Pfizer soared to an all-time high in 2021 due to its product's strong performance during the Covid-19 pandemic. However, as the pandemic ended and market demand decreased, the company's stock price saw a sharp decline. Since the beginning of this year, the company's stock price has basically remained stagnant, significantly lagging behind the S&P 500 Index, which has increased by over 20%.

Technical Analysis

Trend analysis:

The weekly chart shows that Pfizer's stock price reached an all-time high of $54.71 at the end of 2021, followed by a long downtrend with a maximum decline of over 50%, and it hit a four-year low of $24.48 in April 2024.

The daily chart shows that Pfizer's stock price has recently stabilized, with the main sign being the formation of an upward channel and rectangular consolidation range.

Indicators interpretation:

● Pfizer's stock price is currently situated between the 50-day and 200-day moving averages, and these two averages are showing nearly horizontal trends, indicating that the market is in a consolidation phase. The 50-day moving average, serving as a short-term trend indicator, may act as a potential resistance level for the stock price in the short term.

● The Bollinger Bands (BOLL) indicator shows that the stock price has been basically situated between the Bollinger Bands for the past two months, with the upper and lower bands respectively acting as resistance and support levels.

● The KDJ indicator has released a golden cross signal, and the Candlestick has crossed above the 20 oversold boundary, indicating a high probability of a short-term rebound in the stock price.

Overall, the long-term trend of Pfizer's stock price remains weak, but the short-term trend has improved, currently undergoing a Bottom Rebound from a four-year low. Considering that the stock price is currently maintaining a sideways consolidation pattern, investors can use the Bollinger Bands Indicators on the daily chart to "buy low and sell high." This trading strategy may be effective until the rectangular formation is broken.

This content discusses technical analysis; other methods, including Fundamental Analysis, may provide different perspectives. The examples provided are for illustrative purposes only and do not reflect expected results.

All investments involve risks, including the potential loss of principal, and there is no guarantee that any investment strategy will be successful.