Biotech And Pharmaceutical Stocks To Watch

Pfizer, Inc. (NYSE:PFE) is the largest global pharmaceutical company in terms of revenues, and an R&D powerhouse in terms of pipeline. All along, Pfizer has been investing heavily in research to prepare for a pharmaceutical market that is evolving, with the use of technology moving the industry toward a more personalized medicine.

On 24 August, BMO Capital Markets affirmed its “outperform” rating on Pfizer stock, based on its strong pipeline, customer relationships and cost cuts. The firm also said the company’s 2.5% dividend yield looks safe, and the outlook for the company is solid.

I believe that the firm’s R&D is the center of its success, and its focus on niche diseases is one of the many reasons for this belief. This focus means Pfizer creates products with the potential to be fairly resilient in the face of stiff competition.

Further on cost cuts, BMO is relatively unimpressed with Pfizer’s cost cutting, even though they think the cost savings are getting somewhere.

On 26 August, Pfizer released an upbeat earnings report, which resulted in the stock jumping 3.3% on 27 August.

Sales rose 6% to $13.04 billion, driven by a 17% rise in US sales to $6.19 billion and a global 6% increase to $12.85 billion. All told, the company beat analysts’ estimate by roughly $240 million. Earnings per share rose to $0.64, up from $0.65 in the year ago quarter. Sales and earnings were even more impressive, as they were much higher than both analyst expectations and last year’s quarter.

On the conference call with investors, Paul Read, the CEO of Pfizer, said the company has strong fundamentals, and the company is set to deliver even stronger sales growth over the next few years.

Source: Pfizer

Source: Pfizer

“Our strong performance in the quarter exemplifies our strategy of continually investing in our portfolio of innovative and established products to expand our capabilities for sustainable growth, ” said Mr. Read.

Pfizer isn’t the only company dominating the market these days. Rivals Merck and Bristol-Myers Squibb also posted better than expected quarter’s results. Bristol-Myers Squibb beat revenue estimates by over $500 million, with total revenues of $6.55 billion, whereas Merck is hitting $12.33 billion in sales.

You can read more about the other drug firms here.

Investors can read more about Pfizer in this article here.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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