PreMarket Prep Stock Of The Day: Pfizer

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

Since Oct. 29, Pfizer Inc. PFE has traded in a $10 range from $32.80 to $43.08.

To put that into perspective, the issue’s entire range for 2019 was just under $12 ($32.20 to $44.05). Of course, the development and rollout of its COVID-19 vaccine have accounted for the volatile price action.

With the issue in a seven-day losing streak, it’s the PreMarket Prep Stock of the Day.

Pfizer's Up And Down: On Oct. 29, Pfizer made a daily low at $32.80, which was its lowest level since it had bottomed in July at $31.38.

The news flow on the issue began to turn positive Nov. 2, when Pfizer announced that it had enrolled 43,000 patients in a COVID-19 vaccine trial and that it would bypass the U.S. government for vaccine distribution.

That news instigated some early buying in the issue and lifted it as high as $36.41. Pfizer relinquished some of those gains and ended the Friday, Nov. 6 session at $34.51.

Over the weekend, the company announced that, along with its partner BioNTech SE - ADR BNTX, its vaccine candidate showed success in the first interim analysis of its Phase 3 Study, showing it to be 90% effective.

In the following Monday's volatile session, Pfizer peaked off the open at $39.16 and retreated to end the session at $37.61.

The euphoria from that announcement was short-lived and the issue faded back to as low as $34.83 and began to move higher. It should be noted that Pfizer CEO Albert Bourla sold 62% of his holding in the company on that day’s open.

“The sale of these shares is part of Bourla’s personal financial planning and a pre-established (10b5-1) plan, which allows, under SEC rules, major shareholders and insiders of exchange-listed corporations to trade a pre-determined number of shares at a pre-determined time,” the company said. 

The Major Pfizer Rally: Following the Nov. 16 low ($34.93), Pfizer embarked on a relentless mover higher.

A majority of the gains in the jaunt to $43.08 came over the Nov. 25 to Dec. 9 time period.

The issue traded higher in the next seven of nine sessions, finally peaking at $43.09 on Dec. 9. It posted its closing high for the rally the previous day at $42.56.

The move was predicated on the vaccine being approved by the FDA at its Dec. 10 panel meeting. The vaccine received U.K. approval for emergency use on Dec. 2.

Sell The News At Its Finest: The day prior to the FDA panel meeting, Pfizer reached its highest level since December 2018 when it peaked at $44.05 on Dec. 10 and backed off to end the session at $41.85.

It was able to remain above $41 over the next two sessions, but took a big hit on Dec. 14, falling from $41.12 to $39.21.

At this time, it is in the midst of a seven-day losing streak.

"The vaccine proceeds are split with BioNTech, so they only get a portion of the economics," he said. "That said, there should be several billion of incremental revenue near term [that] will be additive to growth metrics.”

Pfizer and the broader large-cap pharma and biotech sector look cheap relative to broad S&P multiples, Charest said. 

"The recent stock pullback presents an opportunity, but watch out for Johnson & Johnson JNJ's Phase 3 vaccine data in early 2021. If that looks good folks, will start to discount the vaccine revenue opportunity further.”

The full discussion from today’s show with Mark can be found here:

Photo by Norbert Nagle via Wikimedia.