Pharmaceutical giant Pfizer (PFE 0.55%) wasn't looking very tall or strong on the stock exchange Tuesday. The company's share price dipped by nearly 2% over the course of the trading session following a pair of analyst price-target cuts. Meanwhile, the bellwether S&P 500 index basically traded flat on the day.
Prognosticators get more bearish on Pfizer
Two pundits tracking Pfizer reduced their fair-value estimations on the stock. Of the pair of price-target cuts, one was drastic and the other modest.
The former came from Truist Financial's Robyn Karnauskas, who took an axe to her level, reducing it to $42 per share from the preceding $62. Despite that deep cut, she's still positive on Pfizer's future, as she maintained her buy recommendation.
The far less dramatic change was enacted by Morgan Stanley's Terence Flynn. He sliced only $1 off his existing price target for a new goal of $39 per share. Like Karnauskas, he kept his recommendation intact, in his case equalweight (i.e., hold).
The reasoning behind the two cuts wasn't immediately apparent. Nevertheless, it doesn't seem coincidental that both came mere days after Pfizer lowered its guidance for full-year 2023.
The pharmaceutical-sector mainstay now expects to book $58 billion to $61 billion in revenue, down significantly from its previous projection of $67 billion to $70. It also reduced its forecast for profitability on a non-GAAP (adjusted), per-share basis and now believes it will earn $1.45 to $1.65. That's quite some distance below the preceding guidance of $3.25 to $3.45.
There is still plenty of hope
No investor likes a guidance cut, but the reasoning behind it is sound and not necessarily cause for concern. That's because Pfizer -- co-developer of the hugely successful Comirnaty COVID-19 vaccine -- did extraordinarily well during the pandemic.
Now that that dire circumstance is (hopefully) melting away, the company's results have come down to earth. It's revealing that in the revised guidance, management said it still expects to see 6% to 8% year-over-year revenue growth in non-Covid products in 2023.
