Why Pfizer shares have reached their limit, according to one analyst

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This week, while Americans are tightening their sleeves against the Covid-19 vaccine developed by

Pfizer

i

BioNTech,

RBC Capital analyst Randall Stanicky says Pfizer’s performance “is nothing short of remarkable.” In a note Wednesday, the analyst notes that Pfizer marketed the vaccine in record time, while rejecting federal money given to rival developers, including Moderna.

But with shares of Pfizer (ticker: PFE) reaching a close on Tuesday of $ 38.71, an increase from its March 2020 fund of around $ 26, Stanicky says the vaccine opportunity of Pfizer has been fully discounted in its share price. Its note lowers the actions to overcome the performance of the sector, comparable to a withholding. It also lowered its price target from $ 43 to $ 42.

“We see it as possible in the short term,” the RBC analyst writes.

On Wednesday afternoon, Pfizer shares had fallen 1.7% to $ 38.06

S&P 500

increased by 0.2%. Shares of BioNTech were down 5.5% to $ 105.09.

Investors have been selling vaccine stocks for the good news of the week, which included a report from the U.S. Food and Drug Administration indicating the agency’s likelihood of approving a Modern (MRNA) vaccine. Modern stocks have been falling all week, going from $ 160 to $ 137 on Wednesday.

Pfizer’s recent share price greatly anticipates that the company will sell most of the 1.3 billion doses of Covid vaccine it says it can produce by 2021. Stanicky’s financial model predicts that Pfizer and BioNTech will sell just over a thousand million doses next year, at $ 19.50 a dose, with about 45% of those sales in the United States. The resulting $ 20 billion in vaccine revenue would account for 45 percent of Pfizer’s global sales by 2021, he said, and 90 cents of the approximately $ 3.50 from the adjusted earnings it predicts.

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But there will be other vaccines against Covid, including a competitive offer from Moderna that will likely get US clearance this week. As the pandemic ends, the Covid vaccine market will also shrink, reducing sales of Pfizer / BioNTech shots to a couple of billion dollars a year, he concludes.

The analyst has not changed his constructive view of the rest of Pfizer’s business, which he believes will increase its profits by 10% a year, now that the company has diverted its slower-growing products to an entity called

Viatris

(VTRS). But the company will suffer some patent expirations from 2026 and the RBC analyst is not convinced that its development of products such as gene therapies is mature enough to offset sales losses.

“Pfizer deserves credit for bringing the first vaccine to market above the finish line,” Stanicky writes. But the best scenario for Covid sales has been set in action, he concludes.

Write to Bill Alpert to [email protected]