Pfizer Stock Surges After Vaccine Deal with U.S. Government

The equity has gained 22% in the last six months

Digital Content Manager
Dec 23, 2020 at 11:09 AM
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The shares of Pfizer Inc. (NYSE:PFE) are up 1.9% at $37.48 at last check, after the pharmaceutical company announced a second agreement with the U.S. government to supply an additional 100 million doses of its COVID-19 vaccine for $1.95 billion. The doses are expected to be delivered by July 31, and the company already has a deal for 100 million doses underway. The U.S. government also has the option to acquire up to 400 million additional doses of the vaccine, which is being produced in partnership with BioNTech (BNTX).

Digging deeper, Pfizer stock has been cooling off from an early December rally to the $43 mark, which was just shy of the security's 2018 highs. Shares have had a volatile run on the charts this year, but have since recovered from a March 23, six-year low of $26.43. What's more, the 60-day moving average has contained the security's latest pullback, and PFE is up 22.6% in the last six months. 

Analysts remain cautious toward Pfizer stock, with 10 of the 15 in question carrying a tepid "hold" rating, while the remaining five consider the stock a "strong buy." Meanwhile, the 12-month consensus price target of $41.79 is a 11.7% premium to its current perch. 

The options pits echo that skepticism, with puts becoming more popular. This is per PFE's 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 79% of readings from the past year. In other words, there is a healthier-than-usual appetite for long puts of late. 

Lastly, the equity's Schaeffer's Volatility Scorecard (SVS) stands at a high 83 out of 100. This means Pfizer stock has greatly exceeded option traders' volatility expectations during the past year -- a boon for options buyers.

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