Key Takeaways

  • Analysts estimate adjusted EPS of $0.97 vs. $0.78 in Q2 FY 2020.
  • Pfizer revenue is expected to grow at the fastest rate in at least 14 quarters, nearly doubling from Q2 FY 2020.
  • The potential need for COVID-19 booster shots could fuel Pfizer's sales even further.

Pfizer Inc. (PFE), one of the world's largest drug companies, in recent months has distributed more than 160 million doses of its COVID-19 vaccine, co-developed with BioNTech S.E. (BNTX). That may be just the beginning of surging sales for Pfizer because global demand for the vaccine is expected to remain high for several years. In 2021 alone, analysts expect the vaccine to contribute nearly all of the company's $31 billion increase in sales, helping to boost total company revenue by nearly 75% to $73.2 billion.

Multiple other factors could influence future sales of Pfizer COVID-19 vaccines. In recent months, the company began to test the vaccine with children as young as six months of age. Pfizer's vaccine is currently under emergency use authorization (EUA) by the U.S. Food and Drug Administration (FDA) for individuals 12 years and older. Should the vaccine receive approval for younger children, it is likely that the company would sell additional doses as countries worldwide expand vaccination programs.

Another potential driver of vaccine purchases would be booster shots for vulnerable individuals due to the rise of COVID-19 variants such as the contagious Delta variant. In late July, the Biden administration said that it expects some individuals to require a third shot of the Pfizer vaccine in order to maintain protection. If this happens, demand for Pfizer vaccines may rise further. At the moment, the Centers for Disease Control and Prevention (CDC) says that the need for booster shots has not been established and that no additional doses are recommended.

Investors will watch how these forces are affecting Pfizer's growth when the company reports earnings on July 28, 2021 for Q2 FY 2021. For Q2, analysts expect the second-fastest adjusted earnings growth in at least 14 quarters, though slower than the most recently reported first quarter. Analysts predict the fastest revenue growth in more than three years in Q2.

Pfizer shares have struggled to keep pace with the broader market over the past year. The company's stock outpaced the market for only two brief periods: in late July and early August of 2020, and again in early December. After the December high, Pfizer shares tumbled to a low in early March 2021 before mounting a sustained advance through July. Still, as of July 26 Pfizer lagged behind the broader market. The company's stock has provided a 1-year total return of 22.4%, behind the total return of 36.5% for the S&P 500.

One Year Total Return for S&P 500 and Pfizer
Source: TradingView.

Pfizer Earnings History

Pfizer suffered a five-quarter streak of adjusted EPS declines starting with Q3 FY 2019 and ending in Q3 FY 2020. The last quarter of 2019, before the start of the COVID-19 pandemic, saw the largest decline, with adjusted EPS falling by 42.7%. But Pfizer reversed this trend a year later, starting in Q4 FY 2020. Adjusted EPS rose by 16.0% YOY in that quarter, and accelerated to a growth rate of 47.1% YOY in Q1 FY 2021. During that quarter, Pfizer posted its largest adjusted EPS gain in at least three years. Now, analysts expect growth to slow somewhat to 23.8% YOY.

While earnings growth may slow, analysts expect revenue growth to increase in Q2 FY 2021. Pfizer posted six straight quarters of YOY revenue declines through Q3 FY 2020. Like adjusted EPS, revenue growth picked up and posted an 11.8% YOY gain in Q4 FY 2020. As Pfizer's COVID-19 vaccines were distributed globally in Q1 FY 2021, revenue increased 44.6%. Analysts see faster growth in Q2 FY 2021, with revenue rising 90.8% YOY. Analysts expect revenue for the quarter to be $18.7 billion, by far the largest quarterly revenue number since at least first quarter of 2018.

Pfizer Key Stats
  Estimate for Q2 FY 2021 Q2 FY 2020 Q2 FY 2019
Adjusted Earnings Per Share $0.97 $0.78 $0.80
Revenue (billions) $18.7 $9.8 $13.3

Source: Visible Alpha