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Pfizer Inc. (NYSE:PFE) faced a challenging 2023 in the stock market, with its shares plummeting from over $50 to a low of $25. However, recent developments suggest a potential turnaround for the pharmaceutical giant. On May 1, 2024, Pfizer reported better-than-expected results for the first quarter of the year.
Their non-GAAP earnings per share of $0.82 surpassed expectations by $0.31, while revenue of $14.9 billion beat estimates by $980 million. Despite a 19.5% year-over-year decline in revenue, Pfizer remained optimistic, reaffirming its full-year revenue guidance of $58.5 to $61.5 billion and raising its adjusted diluted EPS guidance to $2.15 to $2.35. The company also anticipates delivering at least $4 billion in net cost savings by the end of 2024 from its previously announced cost realignment program.
These positive financial results come amid a challenging landscape, particularly with declining revenue from Pfizer’s COVID-19 products, Comirnaty and Paxlovid. Despite this, the company’s non-COVID products saw operational growth, with strong performances from Eliquis and other key offerings. Albert Bourla, CEO of Pfizer, emphasized the robust performance of their non-COVID product portfolio, highlighting increased revenue from recent commercial launches and acquired products.
Now, with Pfizer’s recent financials setting the stage, let’s delve into the charts to analyze whether the company’s stock can break above the $30 mark and sustain its resurgence.
The support level that has stood the test of time
One look at Pfizer’s long-term weekly chart and it becomes apparent how $25 has been a rock-solid support for the stock for more than 10 years now, including during the COVID crash. This time around too, the stock found support near that level as it fell to its 52-week low of $25.20 on 26th April.
PFE chart by TradingView
Since releasing its Q1 numbers the stock bounced back more than 10% from that level, which must offer a glimmer of hope to Pfizer’s existing shareholders. But, apart from that, it also offers a low-risk entry to investors who are bullish on the stock. They can go long at current levels near $28, keeping a stop loss at $25.
If the stock shoots up from here they have a lot to gain while risking only 10-12% on this investment.
Needs to cross near-term resistance levels for sustained upmove
On the short-term, 4-hourly, charts Pfizer’s stock looks exceptionally strong right now with all trend indicators deep in the green. However, the stock faces resistance in close proximity. Since the start of the year, it has failed twice to go above $28.8. Moreover, the 61.8% retracement of the fall from $34 to $25.2 also falls at $28.56.
PFE chart by TradingView
For traders who are bullish on the stock, ideally, they should wait for it to close above $28.8 for a day to take long positions. If it manages to do that, they can keep a stop loss at $26.94 and ride it all the way up to $34.
Traders who are bearish on the stock have a low-risk entry here. They can short the stock at current levels at $28 while keeping a stop loss a few cents above $28.8. If the stock starts falling, they can book profits near $25.5.
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