Source: PaxForex Premium Analytics Portal, Fundamental Insight

You are probably very familiar with the common judgment about Pfizer. It is quite depressing. The company is heavily dependent on its COVID-19 vaccine Comirnaty and its antiviral therapy Paxlovid. Sales of both drugs are expected to decline significantly this year. Pfizer will also face patent expirations on a number of its other best-selling drugs in the next few years. Thus, one can assume that this company's stock will be bypassed.

But while the conventional wisdom is correct about the problems facing Pfizer, the conclusion about the stock is rather flawed. This major drug maker has a lot more to offer. Let's talk about why Pfizer stock looks increasingly attractive.

Pfizer has received an impressive string of good news over the past five weeks. On February 10, 2023, the company announced that the U.S. Food and Drug Administration (FDA) has approved Cibinqo for the treatment of adolescents ages 12 to 18 with atopic dermatitis. Previously, the drug had only been approved to treat people 18 and older. Cibinqo is a key part of Pfizer's growth strategy.

Six days later, the company reported positive results from a late-stage study evaluating the combination of Talzenna and Xtandi to treat metastatic castration-resistant prostate cancer. The combination reduced the risk of disease progression or death by 37%.

On February 22, Pfizer announced that the FDA and the European Medicines Agency (EMA) had accepted regulatory applications for elranatamab for the treatment of multiple myeloma. The drug maker expects that FDA approval could be forthcoming later this year.

Less than a week later, an FDA advisory committee voted to approve Pfizer's respiratory syncytial virus (RSV) vaccine for older adults. The FDA PDUFA date for a decision on the RSV vaccine is set for May of this year. Pfizer believes the RSV vaccine will open up a major market opportunity for the company.

Now we take a look at the events of March 10. The FDA approved the drug Zavzpret (zavegepant) for the treatment of migraine. Pfizer acquired the drug as a result of its purchase of Biohaven last year.

Speaking of acquisitions, Pfizer announced plans last week to buy Seagen for $43 billion. This news caused Seagen's stock to surge. It also caused Pfizer stock to rise nicely, showing the market is excited about the deal. Pfizer will get Seagen's four approved cancer drugs, as well as the promising development of antibody-drug conjugates (ADCs) unless the deal encounters any obstacles. The big drugmaker believes the acquisition will generate another $10 billion in risk-adjusted revenue by 2030.

The main takeaway from this string of good news is that Pfizer is doing exactly what management previously said it would do. The company expects the release of new drugs will more than make up for losses from drugs with expiring patents. The company believes that business development deals will bring in about $25 billion in new revenue by 2030. Pfizer appears to be well on its way to achieving these goals.

However, Pfizer remains undervalued by investors. The company's stock has received only a slight boost from all the positive developments in recent weeks. The stock is still nearly 35% below its late 2021 high.

Pfizer stock is currently trading at just 12 times expected earnings. Its dividend has risen to 4.1%, its highest level since mid-2021.

Investors seem fixated on the difficulties associated with the coronavirus and its treatment. However, the company predicts that even on this front, good news awaits us.

For example, Pfizer predicts that about 65 million doses of Comirnaty will be used this year. That's down from about 92 million doses in 2022. But that number is expected to rise to 98 million doses by 2026 due to the expected launch of the combination flu vaccine COVID.

Pfizer also predicts that demand for Paxlovid will grow steadily over the next few years, even with some decline in its market share. That said, the company's estimates do not include the possibility of promoting antiviral therapy in China.

Perhaps the current conventional wisdom about Pfizer will prove to be correct. However, judging by what is happening now, the outlook for this pharmaceutical company's stock is better than many people think.

While the price is below 43.00, follow the recommendations below:

• Time frame: D1
• Recommendation: short position
• Entry point: 40.11
• Take Profit 1: 39.00
• Take Profit 2: 37.00

Alternative scenario:

If level 43.00 is broken-out, follow the recommendations below:

• Time frame: D1
• Recommendation: long position
• Entry point: 43.00
• Take Profit 1: 44.00
• Take Profit 2: 46.00