While the COVID-19 pandemic hysteria has subsided worldwide, vaccine research and development continue to grab headlines to date. Pandemic darlings Pfizer Inc. (PFE) and Gilead Sciences, Inc. (GILD) have gained significant momentum over the past few years due to their contribution to the fight against the coronavirus and continue to be worth investing due to their robust fundamentals.
The COVID-19 pandemic has significantly impacted the financial market, causing extraordinary volatility and changes in the way stocks are traded. Also, the sky-high inflation and the Fed’s consecutive rate hikes have instilled uncertainty among investors.
However, healthcare stocks tend to perform relatively well due to the inelastic demand for the sector’s products and services. Moreover, medical stocks are expected to remain on investors’ watchlists thanks to extended research and development procedures for more vaccines and drugs to cope with diseases.
So, let’s delve deeper into the stocks mentioned above:
Pfizer Inc. (PFE)
PFE discovers, develops, manufactures, distributes, and sells biopharmaceutical products worldwide. It offers medicines and vaccines in various therapeutic areas. The company serves wholesalers, retailers, hospitals, clinics, government agencies, and disease control and prevention centers.
PFE’s forward EV/EBITDA of 8.55x is 35.2% lower than the industry average of 13.21x. Its forward Price/Sales of 3.25x is 26.1% lower than the industry average of 4.40x.
PFE’s trailing-12-month ROCE of 36.29% is higher than the industry average of negative 39.86%. Its trailing-12-month ROTA of 15.91% is higher than the industry average of negative 30.63%.
PFE’s revenues came in at $24.29 billion for the fourth quarter that ended December 2022, up 1.9% year-over-year. Its income from continuing operations increased 39.7% year-over-year to $5 billion.
Also, its non-GAAP adjusted net income attributable to PFE common shareholders came in at $6.55 billion, up 44.2% year-over-year. In comparison, its non-GAAP adjusted EPS increased 44.3% year-over-year to $1.14.
PFE’s revenue is expected to increase 2.1% year-over-year to $70.79 billion in 2024. Its EPS is expected to grow 11% year-over-year to $3.85 in 2024. It surpassed EPS estimates in all four trailing quarters. PFE’s shares have lost 2.3% intraday to close the last trading session at $40.78.
PFE’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
PFE has an A grade for Value and a B for Quality. Within the Medical – Pharmaceuticals industry, it is ranked #21 out of 174 stocks. Click here for the additional POWR Ratings for Stability, Sentiment, Growth, and Momentum for PFE.
Gilead Sciences, Inc. (GILD)
Biopharmaceutical company GILD discovers, develops, and commercializes medicines in the areas of unmet medical need in the United States, Europe, and internationally for over three decades.
GILD’s forward EV/EBITDA of 8.80x is 33.3% lower than the industry average of 13.21x. Its forward Price/Sales of 3.78x is 14.1% lower than the industry average of 4.40x.
GILD’s trailing-12-month EBIT margin of 40.23% is higher than the negative 0.86% industry average, while its trailing-12-month gross profit margin of 79.26% is 42% higher than the industry average of 55.84%.
GILD’s total revenues came in at $7.39 billion for the fourth quarter that ended December 31, 2022, up 2% year-over-year. Its non-GAAP net income attributable to GILD and non-GAAP EPS came in at $2.11 billion and $1.67, up 143.2% and 142%, respectively.
Analysts expect GILD’s revenue to increase 2% year-over-year to $27.24 billion in 2024. Its EPS is expected to grow 5.3% year-over-year to $7.18 in 2024. It surpassed EPS estimates in all four trailing quarters. GILD’s shares have gained 32.4% over the past year to close the last trading session at $80.89.
It’s no surprise that GILD has an overall A rating, equating to a Strong Buy in our POWR Ratings system. It has an A grade for Growth and Value and a B for Sentiment and Quality. It is ranked first among 403 stocks in the Biotech industry.
Beyond what is stated above, we’ve also rated GILD for Stability and Momentum. Get all GILD ratings here.
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PFE shares were trading at $40.65 per share on Tuesday afternoon, down $0.13 (-0.32%). Year-to-date, PFE has declined -19.94%, versus a 4.08% rise in the benchmark S&P 500 index during the same period.
About the Author: RashmiKumari
Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions.
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