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It’s time to take a pause on Pfizer , according to UBS. Analyst Colin Bristow downgraded shares to neutral from buy, and lowered his price target, citing weaker Covid expectations and a sluggish pipeline for new products. “We are downgrading PFE to Neutral and lowering our PT to $47 (from $55), with the key drivers of this move being: 1) COVID franchise (Paxlovid/Comirnaty) estimates need to come down and we lack conviction in the potential growth out of the ’23 COVID trough,” Bristow wrote in a Thursday note. “2) while PFE’s pipeline has a number of shots on goal, the late stage assets (RSV, etc.) are already in street ests and it is too premature to assign value to the earlier stage assets (TTI-622, etc.), with minimal de-risking catalysts to facilitate this over the next 12 months,” Bristow added. Pfizer shares are down more than 12% this year on expectations that the number and severity of Covid cases will stabilize. Meanwhile, the U.S. has “sufficient” Paxlovid supply to cover 2023 demand, according to the note. At the same time, UBS did not make any “meaningful changes” to its pipeline estimates for Pfizer following the firm’s R & D day. The analyst expects further upside for the stock will come from Pfizer’s business development into long-term growth as it moves away from its Covid product line. But, he said the “cadence and quality of future deals are hard to predict.” The analyst lowered his price target to $47 from $55. The new target is just about in line with where Pfizer shares closed Wednesday at $44.66. The stock was down 0.6% in Thursday premarket trading. “While we see minimal downside from here, the lack of catalysts (see inside) and potential for further downside to COVID estimates drives our move to the sidelines,” Bristow wrote. —CNBC’s Michael Bloom contributed to this report.
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