Pfizer (NYSE: PFE) is scheduled to report its Q4 2022 results on Tuesday, January 31, and we expect it to see little movement, with its revenue falling slightly ahead, but earnings likely missing the consensus estimates. Its Covid-19 vaccine and the antiviral pill will likely contribute a little over $12 billion to its top line, aligning with prior-year quarter’s sales. This figure could be higher with supplies to China. However, their contribution is expected to decline in the coming quarters. While we expect Pfizer
PFE
to post mixed Q4 results, we find its stock undervalued, as discussed below. Our interactive dashboard on Pfizer Earnings Preview has additional details.

(1) Revenues expected to be above the consensus estimates

• Trefis estimates Pfizer’s Q4 2022 revenues to be $24.8 billion, reflecting a 4% y-o-y rise and slightly above the $24.3 billion consensus estimate.
• Although the contribution of Pfizer’s Covid-19 products is expected to decline going forward, its other products, including Eliquis (alliance revenue), Vyndaqel, and Prevnar, will likely see strong sales growth with market share gains.
• Looking at Q3 2022, Pfizer saw a 2% fall in revenue to $22.6 billion due to a tough comparison with the prior year’s quarter and forex headwinds.
• Lower sales for its Primary Care and Specialty Care drugs weighed on Pfizer’s Q3 sales.
• Our dashboard on Pfizer Revenues offers details on the company’s segments.

(2) EPS likely to be below the consensus estimates

• Pfizer’s Q4 2022 adjusted earnings per share is expected to be $1.01 per Trefis analysis, below the consensus estimate of $1.06.
• Pfizer’s adjusted net income of $10.2 billion in Q3 2022 reflected a significant 40% rise from its $7.3 billion figure in the prior-year quarter, partly due to lower income tax provisions on Non-GAAP items.
• However, inflationary and forex headwinds may threaten margin expansion in the near term.
• For the full year 2023, we expect the adjusted EPS to be lower at $4.97, compared to $4.42 in 2021 and an estimated $6.45 in 2022.

(3) PFE stock is undervalued

• We estimate Pfizer’s Valuation to be $57 per share, which is 26% above the current market price of $45.
• At its current levels, PFE stock is trading at a 9x forward earnings forecast of $4.97 on a per-share and adjusted basis for the full-year 2023. This compares with an average of 10x seen over the last three years.
• It’s difficult to value the company using a historical P/E multiple, given that the earnings are expected to decline in the near term, with a lower contribution from its Covid-19 products. As such, it will be interesting to see the company’s outlook for 2023.

While PFE stock looks undervalued, it is helpful to see how Pfizer’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.

Read Related Also: Where Are Yields Headed Next?

Furthermore, the Covid-19 crisis and recent market volatility have created many pricing discontinuities that can offer attractive trading opportunities. For example, you’ll be surprised at how counter-intuitive the stock valuation is for IDEXX Laboratories vs. Entegris
ENTG
.

With higher inflation, the Fed raising interest rates, and concerns over declining earnings in the near term, PFE has fallen 15% in the last twelve months. Can it drop more? See how low Pfizer stock can go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.

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