For immediate release
Chicago, IL – January 7, 2022 – Today Zacks Investment Ideas presents: AbbVie, Inc. ABBV and Pfizer Inc. PFE.
How to Select Stocks During Times of Market Volatility
Yesterday’s price action was brisk as the Nasdaq closed nearly 3%, falling below its 50-day moving average and threatening nearby support levels. It remains to be seen whether this is the start of a larger bearish move comparable to the end of 2018 (which was the last time the Fed got hold of the rate hike button), or this is more moderate volatility similar to what we have seen throughout last year.
In times of heightened market volatility, it is important to note the sectors, industry groups and individual stocks that oppose the trend and outperform the market in general. Stocks capable of weathering the turmoil indicate that institutions are buying stocks and sellers are scarce.
Stocks that hold up well when the market is down tend to lead the next step and continue to outperform. We want to target stocks on an uptrend that belong to leading industry groups. Another piece of evidence we can rely on to select profitable opportunities is whether the stock is hitting a series of new 52 week highs. Only stocks that are in the most powerful uptrends consistently make this list.
We’re going to look at two health care stocks that held up well yesterday and closed in the green as the market crashed. These stocks are hitting a series of new 52 week highs and are trending well. Both are part of the Zacks Large Cap Pharmaceutical industry group, which ranks among the top 37% of all 254 industry groups.
We expect this industry group to outperform over the next 3-6 months. Quantitative research studies have shown that about half of the future appreciation in a stock’s price is due to its industry consolidation. By focusing on top stocks within the top industries ranked by Zacks, you can dramatically improve your stock picking success.
AbbVie is a research-based biopharmaceutical company that develops, manufactures and sells various pharmaceutical products around the world. Its treatments target diseases such as autoimmune and intestinal diseases, severe plaque psoriasis, rheumatoid arthritis, Parkinson’s disease and advanced prostate cancer. AbbVie was incorporated in 2012 and is headquartered in North Chicago, IL.
At Zacks # 2 Buy stock, ABBV became a leading pharmaceutical company after acquiring Botox maker Allergan in a $ 63 billion deal in May 2020. The company built a A promising pipeline of successful new drugs and key FDA approvals over the past few years indicate that sales may continue to exceed estimates in the near future. ABBV’s revenue is expected to have grown 22.86% in 2021 to reach $ 56.28 billion.
AbbVie has beaten earnings estimates in each of the past eleven quarters and is trading at a very reasonable forward P / E of 9.6. The company has posted an average surprise of + 3.02% over the past four quarters, helping ABBV stock to rise nearly 34% in the past year.
Zacks’ consensus estimate for 2021 is $ 12.69, which would represent a 20.17% increase from 2020. For 2022, analysts expect an 11.03% increase in EPS at $ 14.09. ABBV Expected to Release Final Quarterly ’21 Report on February 2sd.
Pfizer is a global pharmaceutical company that discovers, manufactures and markets medicines for humans and animals. PFE’s diverse portfolio includes biological and small molecule drugs, vaccines and nutritional health products. Pfizer is also involved in the contract manufacturing industry, serving wholesalers, retailers, hospitals, clinics, governments and pharmacies. PFE was founded in 1849 and is based in New York, NY.
In 2020, PFE’s Vaccines segment represented 15.7% of total sales. The COVID-19 vaccine from Pfizer and its partner BioNTech is now approved for emergency use in many countries and is fully approved in the United States. The duo have already shipped 2 billion doses to 152 countries and are expected to have manufactured 3 billion doses last month. Additionally, Pfizer’s oral antiviral pill for COVID-19 was approved last month and will further boost revenue this year.
The PFE is relatively undervalued, trading at a forward P / E of 9.91. The company has beaten earnings estimates in six of the past seven quarters, most recently posting EPS last November of $ 1.34 – a surprise of + 24.07% from consensus. PFE delivered a surprise average earnings over the past four quarters of 10.85%, supporting the stock’s 55.4% rise in the past year.
What the Zacks model reveals
The Zacks Earnings ESP (Expected Surprise Prediction) seeks to identify companies that have recently seen positive earnings estimate revision activity. The technique has been found to be very useful in finding positive earnings surprises. In fact, by combining a rank 3 of Zacks or better with a positive earnings ESP, stocks produced a positive surprise 70% of the time according to our 10-year backtest.
PFE is a Zacks # 1 Strong Buy stock and has a positive ESP of 6.24%. The recent upward trend in earnings looks set to continue.
Analysts expect annual profit of $ 4.21 when PFE submits its ’21 final quarterly report on February 8e. That would translate to about 90% growth over 2020 EPS. In 2022, analysts increased their EPS estimates by 43.23% in the past 60 days. The 2022 EPS estimate now stands at $ 5.50, which would represent a 30.68% growth from last year.
Keep an eye out for these two pharmaceutical companies in 2022.
Zacks Top 10 stocks for 2022
In addition to the investment ideas discussed above, would you like to know our top 10 picks for all of 2022?
From its creation in 2012 until November, theTop 10 Zacks stocks gained an impressive + 962.5% versus + 329.4% for the S&P 500. Now our research director combs through the 4,000 companies covered by the Zacks rankings to select the top 10 tickers to buy and hold . Don’t miss your chance to participate in these actions when they release on January 3.
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Zacks names “best single choice to overtake”
Among thousands of stocks, 5 Zacks pundits each chose their favorite to soar + 100% or more in the coming months. Of these 5, research director Sheraz Mian chooses one to have the most explosive advantage of all.
As one investor put it, “Cure and prevent hundreds of diseases… what should this market be worth? This company could compete with or surpass other recent Zacks stocks which are expected to double as Boston Beer Company which climbed + 143.0% in just over 9 months and NVIDIA which climbed + 175.9% in one. year.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.