Pfizer stock tends to fall off in January
While the broader market is kicking off the new year on a high note, Pfizer Inc. (NYSE:PFE) is clinging close to breakeven. Last seen down less than 0.3% to trade at $51.08, the equity's 10-day moving average has reemerged as pressure, while a familiar ceiling at the $55 mark stopped the stock's fourth-quarter rally dead in its tracks. Investors might want to wait out buying the dip, however, as January tends to be a historically bearish month for PFE.
This is per data from Schaeffer's Quantitative Analyst Rocky White, who complied a list of the 25 worst performing S&P 500 (SPX) stocks during the month. According to this list, seven of the past 10 Januaries have resulted in losses for Pfizer stock, which also averaged a 1.8% monthly decline during that time period, making it the second worst pharmaceutical stock on the list. From its current perch, a similar drop would put PFE at roughly $52.
A round of downgrades could be in the cards. Of the 10 analysts in coverage, seven call it a "strong buy." Plus, the 12-month consensus price target of $55.49 is an 8.1% premium to current levels.
Now could be a good time to speculate on more downside for PFE with options. This is because the security sports a Schaeffer's Volatility Index (SVI) of 23%, which stands higher than just 4% of readings from the past year. In other words, options players are pricing in relatively low volatility expectations at the moment.