Pfizer’s Covid-19 Vaccine Approved for 12-15-Year-Olds — Should You Buy the Stock?

South San Francisco, CA, USA - Feb 8, 2020: American multinational pharmaceutical corporation Pfizer's South San Francisco office.
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There’s been good news upon good news for pharmaceutical company Pfizer, whose COVID-19 vaccine, co-developed with BioNTech, was recommended yesterday for use in 12-to-15-year-olds. On the heels of that announcement, the U.S. Centers for Disease Control and Prevention also said that both Moderna and Pfizer vaccines continue to be “more than 90% effective, based on various studies,” CNN reports.

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Pfizer stock jumped slightly, from $39.34 on Tuesday at closing time, up to over $40 per share Thursday morning following Wednesday’s announcements. Overall, the Dow Jones Industrial Average showed a rally, rising 500 points, with tech stocks like Apple and Microsoft also rising.

Pfizer and BioNTech are currently submitting paperwork to the Food and Drug Administration for its coronavirus vaccine, which would mean the vaccine could remain on the market once the pandemic is officially declared to be over, Investor’s Business Daily reports. Approval would also mean the companies could market the vaccine directly to customers and change its price. The company also announced it is also planning to seek approval for a COVID-19 booster shot in mid-July, IBD wrote.

Showing a strong quarterly earnings report, Pfizer recently announced $3.46 billion in first-quarter sales of the vaccine, with $14.58 billion total sales, reflecting 42% sales growth, Investor’s Business Daily reports. The company showed 8% operational sales growth solely based on other products, without taking into account the vaccine.

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With these numbers in mind, you may be ready to hit the “buy” button on this big pharma stock. Should you? MarketSmith.com put the Pfizer stock in a buy zone just above a buy point when it hit $39.77, Investor’s Business Daily reported.

Several market experts are showing caution when it comes to investing in the company, however.

“Cash flows from COVID-19 vaccine sales provide Pfizer with greater optionality, but we wait to see how Pfizer allocates that capital before assessing whether they have improved their 2026-2030 outlook,” wrote Mizuho Securities analyst Vamil Divan in a note, excerpted by Motley Fool. Divan moved his assessment from “buy” to “neutral” following the earnings call.

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On the other hand, profit margins could soon start to rise as vaccines are manufactured at ever-growing volumes, Motley Fool says. The same article points out that fears over the World Trade Organization waiving patent protections for coronavirus vaccines from U.S.-based companies shouldn’t matter much. Few other companies have the manufacturing capabilities and technical expertise to copy the advanced mRNA technology, Motley Fool writes.

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Finally, there is the fact that Pfizer already yields dividends for shareholders, which is enticing to some investors. However, Pfizer subsidiary Viatris, a generic drug manufacturing division of the company, is planning to initiate dividend payments later this year, which will reduce dividend payments for Pfizer, Motley Fool reports.

Ultimately, IBD gives Pfizer a Relative Strength Rating of just 37 out of 99, however, it remains in the buy zone for the time being, especially as a dividend-earning, long-term hold.

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About the Author

Dawn Allcot is a full-time freelance writer and content marketing specialist who geeks out about finance, e-commerce, technology, and real estate. Her lengthy list of publishing credits include Bankrate, Lending Tree, and Chase Bank. She is the founder and owner of GeekTravelGuide.net, a travel, technology, and entertainment website. She lives on Long Island, New York, with a veritable menagerie that includes 2 cats, a rambunctious kitten, and three lizards of varying sizes and personalities – plus her two kids and husband. Find her on Twitter, @DawnAllcot.

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