Pfizer Inc. (PFE), a leading pharmaceutical company, reaffirmed its guidance for the fiscal year 2023 but provided downside guidance for fiscal year 2024. The company reaffirmed diluted earnings per share (EPS) for FY23 to be in the range of $1.45 to $1.65 and revenues in the range of $58 billion to $61 billion, lower than the FactSet Consensus estimate of $59.65 billion.

However, the guidance for FY24 is notably lower than market expectations. Pfizer expects EPS for FY24 to range from $2.05 to $2.25, compared analyst expectations of $3.17. The company forecasts revenues for FY24 to be between $58.5 billion and $61.5 billion, falling short of the Street expectations.

Pfizer's projected revenue for 2024 includes approximately $8 billion from its COVID-19 vaccine, Comirnaty, and antiviral drug, Paxlovid. It also encompasses around $3.1 billion from the acquisition of Seagen (SGEN) and approximately $1 billion related to the reclassification of Pfizer's royalty income. Excluding the revenues from Comirnaty and Paxlovid, Pfizer expects to achieve an operational revenue growth of 8% to 10% for FY24. When excluding the revenues from Comirnaty, Paxlovid, and Seagen, the projected operational revenue growth stands at 3% to 5%. These growth rates are compared to the mid-point of Pfizer's FY23 revenue guidance range.

To further strengthen its financial position, Pfizer aims to save at least $4.0 billion through a cost realignment program by the end of 2024. This would potentially allow the company to reclaim its pre-pandemic operating margins.

Pfizer's pending of acquisition Seagen is expected to close on December 14, 2023. The acquisition is expected to contribute approximately $3.1 billion in revenues in full-year 2024. The company anticipates the cost realignment program to deliver annual net cost savings of at least $4.0 billion by the end of 2024, which could potentially help regain pre-pandemic operating margins. 

While Pfizer's guidance for FY24 fell short of market expectations, the company believes in the strength of its product portfolio, especially Comirnaty and Paxlovid. Pfizer's cost-saving initiatives and the expected contribution from the Seagen acquisition also provide some positive outlook for the company's financial performance in 2024.

Bulls are optimistic about Pfizer's strong product portfolio, with Comirnaty and Paxlovid expected to deliver combined revenues of approximately $8 billion in 2024. Additionally, the Seagen acquisition is seen as a strategic move to expand Pfizer's oncology portfolio and diversify its revenue streams. However, bears are concerned about the company's revised revenue guidance for fiscal year 2024, which indicates a potential slowdown in revenue growth. Moreover,the impact of the COVID-19 pandemic on the global economy and the eventual decline in demand for Pfizer's COVID-19 vaccine and treatment could also negatively affect the company's financial performance in the long run.

Pfizer's guidance for fiscal year 2024 indicates a slower revenue growth rate compared to the previous year, which has negatively affected investor sentiment. The company's strong product portfolio and the anticipated benefits of the Seagen acquisition are positive factors for investors. 

Shares of PFE are down approximately 10% as participants digest the disappointing 2024 outlook. The reaffirmation of 2023 is fine but certainly overshadowed by the warning of a slow down in its business. 

Shares of PFE have been in a downward trend since hitting $61.71 in December of 2021. It was testing major support at its 200-monthly ($29.70) level. It broke below that following the announcement and is testing the low end of the monthly Bollinger Band. 

The stock is down -44% YTD and trades at a very cheap valuation of 9x forward earnings. The dividend yield is attractive at 5.51%. The question for investors is whether the sell off this morning marks a bottom in sentiment. The cheap valuation and coupon investors could get paid will factor into these decisions.