Pfizer (NYSE:) is a research-based, international biopharmaceutical company.

The company’s primary revenue source is from selling and manufacturing biopharmaceutical drugs. It also makes a small amount of money from partnerships that allow it to market products created or created by other parties.

Pfizer is a leader in pharmaceuticals such as Eliquis (prevnar13), Enbrel and Chantix, Sutents, Xtandi, Xeljanz, Enbrel, Chantixs, Sutents, Xtandi, Xtandi and Prevnar 13. The company has also developed its vaccine for COVID-19 with BioNTech (BNTX) in response to the current pandemic.

Although the stock price has risen significantly this year, shares are not very costly. Pfizer’s diversified portfolio of pharmaceutical assets should continue to support solid results.

The dividend will provide capital returns that are well covered and have the potential for growth in the future. This stock has a neutral rating. (See Pfizer stock charts on TipRanks)

Recent Performance

Due to enjoying significant tailwinds in the current environment, Pfizer’s Q2 results came in excellent.

The company’s total revenues increased 92% to $19 Billion. The company’s sales soared 92% to $19 billion due to an increase in vaccine revenues which reached $9.2 Billion, compared with $1.2 Billion in the previous year.

Pfizer’s vaccine revenues are a rare opportunity. There are however two important points to be aware of. The first is that a large portion of the world’s population still has not been vaccinated. Pfizer will likely continue to deliver vaccines for quite some period of time.

Second, with booster shots just approved by the FDA, it’s quite likely that Pfizer may enjoy a recurring stream of vaccine cash flow for an extended period of time, especially if the pandemic persists.

Regardless of the vaccine revenue, Pfizer’s financial performance is still strong. Revenue growth increased 10% to $11.1 billion year-over-year, excluding the revenue increase due to the vaccine. Prevnar revenues increased 34% annually, while oncology, second highest contributor to revenue, saw a 16% increase. 

What’s the Upside?

The upside potential for Pfizer is limited after the stock’s rise over the last year. The adjusted dilutedEPS guidance was increased by management to $3.95 to 4.05. This implies that Pfizer’s current upside may be limited.

Investors should be aware that EPS could retract if vaccine revenue falls in the near term.

It has good room to increase the DPS. This annualized rate is $1.56 and it covers the company’s underlying profits. Potentially, the stock’s 3.6% yield might be a catalyst to a valuation increase in this low-rate environment.

This suggests that the stock has more upside potential, even though it is on a long-term rally.

Wall Street’s Take

Turning to Wall Street, Pfizer has a Hold consensus rating, based on two Buys, nine Holds, and zero Sells assigned in the past three months. At $45.55, the average Pfizer price target implies 4% upside potential.

Disclosure: Nikolaos Sismanis had no position at the time this article was published.

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