Pfizer Earnings: Better-Than-Expected COVID-19 Sales Buoy Results, but Long-Term Outlook Unchanged

Pfizer reported first-quarter results ahead of our projections, largely driven by higher-than-expected COVID-19 product sales. While sales of COVID vaccine Comirnaty fell to $3.1 billion, this was above our $2.2 billion estimate, and COVID treatment Paxlovid generated $4.1 billion, well ahead of our $1.6 billion estimate. We had expected a greater work-down in the high levels of inventory for both products. We are not making any major changes to our fair value estimate, as our projected 2023 COVID product sales are still tracking to a 50%-plus decline as the pandemic eases, followed by expected stable demand for several years. However, management appears to be guiding to much higher Comirnaty and Paxlovid sales in 2024 and beyond. While we view the stock as already undervalued, if management achieves its longer-term COVID sales projection, further upside to our valuation is likely.