By Sam Boughedda
Wells Fargo analysts downgraded shares of Pfizer (NYSE:PFE) to Equal Weight from Overweight, cutting the firm's price target on the stock to $50 from $54 per share in a note to clients on Tuesday.
Pfizer shares have declined more than 3% in early trading, adding to its decline so far in 2023.
The analysts told investors that they believe a COVID and expense reset is required for upside in the stock.
"We think PFE needs a COVID reset before the stock could work again," wrote the analysts, who added that they think the company could have an attractive profile long term as it aspires to grow at 6%+ CAGR topline in 2025-30 and is "doing the right things to get there with pipeline and M&A."
However, Wells Fargo believes it could take time for investors to appreciate this given future M&A is an important component.
"Meanwhile, uncertainty around COVID business could make investors nervous. COVID reset could occur when guidance is provided on 4Q'22 call," continued the analysts.
Wells Fargo models a lower 2023 to 2025 earnings per share for Pfizer compared to consensus due to lower COVID revenues and higher expenses.