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TheStreet Open House

Pfizer Needs Big Earnings Beat

Stocks in this article: PFE MRK JNJ BMY GILD

NEW YORK ( TheStreet) -- Falling earnings don't make for a strong stock; however, Pfizer's (PFE - Get Report) shares have continued to move higher.

Who They Are: Pfizer is a research-based, global pharmaceutical company that trades an average of 56.4 million shares per day with a marketcap of $175 billion.

Pfizer is forecast to record lackluster second-quarter earnings before the market opens on July 31. The consensus estimate is currently 55 cents a share, a fall of 5 cents (8.3%) from 60 cents during the equivalent quarter last year.

Fifteen out of 17 analysts covering the stock (over 70%) rate Pfizer a buy or strong buy. The company has two holds, and not one sell rating. The stock has appreciated 19.1% in the last year, and the average analyst target price for PFE is $25.58.

May 1 was the last earnings release with a closing price of $22.78, compared to a current price of $23.33. (Read a recent bullish article including Pfizer Are Elan, Pfizer, Lilly and J&J Buys After a Failed Drug Test? )

Management is executing with an increase of year-over-year revenue. Revenue reported was $67.43 billion last fiscal year compared to $67.06 billion in the previous year. The bottom line has rising earnings year-over-year of $10.01 billion last fiscal year compared to $8.26 billion in the previous year.

PFE beat earnings in all four of the last four quarters, with an average beat of 3 cents (5.56%) per share.

PFE PE Ratio Chart PFE PE Ratio data by YCharts

Industry and peer comparisons of companies that report before Pfizer:

Johnson & Johnson (JNJ - Get Report) recently beat earnings by a penny with $1.30 EPS. Wall Street wasn't pleased and shares have fallen about $2 a share to trade near $67.50.

Analysts as a whole like this company. Currently, J&J has 15 buy recommendations out of 23 analysts covering the company, eight holds and zero sell ratings. Over half the analysts covering J&J rate it as a buy or a strong buy.

J&J has appreciated 2.2% in the last year, and the average analyst target price for J&J is $74.60. J&J has a sizeable short interest of 9.5%.

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