Given that COVID-19 is here to stay for the foreseeable future, investors could still benefit from their investments in companies that saw record-breaking sales during the pandemic’s height because of the effectiveness of their products in fighting the virus. With the potential resurgence of COVID-19 in several countries, Pfizer (PFE) and Gilead Sciences (GILD) could be wise additions to one’s portfolio. Read on….
Data from the CDC shows that 300–400 Americans died from COVID-19 each day in November. It appears that the virus is here to stay for the foreseeable future. According to this week’s national ensemble, 1,600 to 5,900 additional COVID-19 deaths are likely to be reported in the week ending January 21, 2023, with the number anticipated to rise over the following four weeks.
The global market for mRNA vaccines and therapeutics is expected to reach $ 56.1 billion in 2022 and is projected to grow at a CAGR of 2.9% to reach $66.2 billion by 2028.
While most COVID-19 winners lost significantly this year, companies that played a crucial role in helping the world fight against the virus during the pandemic’s height could still gain.
The vaccine and drug produced by Pfizer Inc. (PFE) and Gilead Sciences, Inc. (GILD) could help them drive significant revenues in the foreseeable future. So, these two stocks could be wise additions to your portfolio.
Pfizer Inc. (PFE)
PFE is a research-based biopharmaceutical business. It is involved in the global research, development, production, marketing, and distribution of biopharmaceutical products. The business operates through two segments: PC1 and Biopharma.
On November 18, PFE and BioNTech SE (BNTX) released findings from an analysis of the immune response induced by their bivalent COVID-19 vaccine Omicron BA.4/BA.5 adapted against more recent Omicron sublineages. These results suggest that the companies’ bivalent vaccine elicits a larger increase in neutralizing antibody titers than the companies’ original COVID-19 vaccine.
PFE’s Omicron BA.4/BA.5-adapted bivalent booster might now provide greater protection against COVID-19 due to the Omicron BA.4 and BA.5 sublineages, as well as novel sublineages.
On November 10, PFE’s Institute of Translational Equitable Medicine (ITEM) established its partnership with Fox Chase Cancer Center and Sylvester Comprehensive Cancer Center to begin a cancer genomics project to identify novel genetic, biochemical, and social causes of cancer in populations of African ancestry.
This alliance will aid PFE in better understanding the causes of health inequalities. The alliance will also assist the company by bridging gaps in applying scientific knowledge to disparities in disease incidence, prevalence, and outcomes for African ancestry cancer patients.
For the fiscal 2022 nine months (ended September 2022), PFE’s revenues increased 32% year-over-year to $76.04 billion, while its income from continuing operations grew 40% from the year-ago value to $26.40 billion. Net income attributable to Pfizer’s common shareholders increased 42% year-over-year to $26.38 billion, while its EPS stood at $4.60, a 39% increase from the year-ago value.
The company has raised its dividends for 12 consecutive years. It pays a $1.64 per share dividend annually, which translates to a 3.21% yield on the current price. PFE’s four-year average dividend yield is 3.63%, and its dividend payments have grown at a CAGR of 5.7% over the past five years.
Analysts expect PFE’s EPS and revenue for the current fiscal year (ending December 2022) to increase 46.5% and 23.2% year-over-year to $6.48 and $100.17 billion, respectively. Moreover, the company has surpassed the consensus EPS in all four trailing quarters, which is impressive.
Shares of PFE have gained 2.8% over the month to close the last trading session at $50.80.
PFE’s POWR Ratings reflect its strong outlook. The stock has an overall rating of A, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
The stock has an A grade for Value and a B for Quality, Growth, and Sentiment. Within the Medical – Pharmaceuticals industry, it ranked #2 of 159 stocks.
To see additional POWR ratings for Momentum and Stability for PFE, click here.
Gilead Sciences, Inc. (GILD)
GILD specializes in finding, developing, and marketing medicines to cure and prevent illnesses like cancer, viral hepatitis, and the human immunodeficiency virus (HIV). The business also aims to restore the immune system’s balance by creating agonists targeting immune suppressive receptors. The company developed the first antiviral drug approved to treat COVID-19 and continues to invest in this space.
On December 27, GILD and Jounce Therapeutics, Inc. (JNCE) revised their current license agreement for GS-1811, allowing GILD to buy out any potential future contingent payments due under the license deal signed in August 2020.
The GS-1811 news further exemplifies GILD’s dedication to its rapidly developing oncology franchise and aim of developing next-generation cancer treatments. With its potential new mechanism for immune system activation, GS-1811 will provide the chance to potentially alter the accepted standard of care by reducing solid tumors by attacking cancerous cells from within.
On December 22, Kite Pharma, Inc., a GILD Company, and Daiichi Sankyo Co., Ltd. (DSNKY) announced that the Japan Ministry of Health, Labour, and Welfare (MHLW) approved Yescarta, a chimeric antigen receptor (CAR) T-cell therapy, for the initial treatment of patients with relapsed/refractory large B-cell lymphoma.
Given that Japan has the second-highest number of non-Hodgkin lymphoma diagnoses worldwide, GILD will benefit from this clearance as it will be a significant step toward getting this novel medication to more patients earlier.
For the fiscal 2022 third quarter (ended September 30, 2022), GILD’s HCV product sales increased 22% year-over-year to $524 million, while its total product sales, excluding Veklury, increased 11% from the previous year’s quarter to $6.05 billion.
GILD has raised its dividends for seven consecutive years. It pays a $2.92 per share dividend annually, which translates to a 3.43% yield on the current price. Its dividend payments have grown at a CAGR of 7% over the past five years.
Analysts expect GILD’s EPS for the fourth quarter (ending December 2022) to increase 115% year-over-year to $1.48. Also, the company is expected to report an EPS of $1.71 for the fiscal 2023 second quarter (ending June 2023), indicating an 8% increase year-over-year. Moreover, the company has surpassed its consensus EPS estimates in three of the four trailing quarters.
The stock has gained 35.9% over the past six months to close the last trading session at $84.57.
GILD’s POWR Ratings reflect its promising outlook. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system.
The stock has an A grade for Sentiment and a B for Value and Quality. Within the Biotech industry, it ranked #3 of 376 stocks.
Click here to see additional ratings of GILD for Stability, Growth, and Momentum.
PFE shares rose $0.17 (+0.33%) in premarket trading Thursday. Year-to-date, PFE has declined -11.18%, versus a -19.41% rise in the benchmark S&P 500 index during the same period.
About the Author: Aanchal Sugandh
Aanchal’s passion for financial markets drives her work as an investment analyst and journalist. She earned her bachelor’s degree in finance and is pursuing the CFA program.She is proficient at assessing the long-term prospects of stocks with her fundamental analysis skills. Her goal is to help investors build portfolios with sustainable returns.
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