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Why Pfizer Stock Jumped Today

By Joe Tenebruso – Dec 15, 2021 at 11:04AM

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Even more gains could lie ahead for the vaccine maker's investors.

What happened

Shares of Pfizer (PFE 1.04%) rose on Wednesday, following positive analyst commentary.

As of 3:30 p.m. ET, the drugmaker's stock price was up more than 5%. 

So what 

On Monday, UBS analyst Colin Bristow placed a buy rating on Pfizer's stock and boosted his share price forecast from $52 to $60. Bristow estimates that the pharmaceutical titan will earn at least $14 billion in sales from its new oral antiviral treatment, Paxlovid. The pill has been shown to reduce the risk of hospitalization or death in high-risk patients with COVID-19 by nearly 90% in clinical trials. 

All told, Bristow sees Pfizer earning as much as $50 billion in sales from COVID-19 vaccines and treatments in 2022.

A miniature gold bull is on a keyboard button labeled buy.

Analysts have grown more bullish on Pfizer's shares in recent days. Image source: Getty Images.

On Tuesday, investors applauded Pfizer's acquisition of Arena Pharmaceuticals (ARNA). Mizuho analyst Vamil Divan lifted his price target on Pfizer's stock from $44 to $56 after news of the deal broke. Divan views the purchase of Arena as an intelligent way for Pfizer to diversify its product portfolio and strengthen its long-term growth prospects.  

Now what

Helping the world battle COVID-19 has been a boon for Pfizer. The healthcare giant's revenue soared 130% year over year to $24.1 billion in the third quarter, driven by sales of its Comirnaty COVID-19 vaccine. Its adjusted income, in turn, surged 133% to $7.7 billion, or $1.34 per share.

Yet despite its enormous drug development success and tremendous profit generation, Pfizer's stock currently trades for only about 11 times analysts' earnings projections for next year. That's arguably a bargain for a best-in-class drug developer. Pfizer's shares, in turn, could continue to climb higher in the weeks and months ahead.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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