Pfizer Inc. PFE may have been a hero in the COVID-19 vaccine race, but its stock is stuck in the slow lane. Down nearly 14% over the last year, the pharma giant's shares have struggled as demand for its pandemic-related treatments has fizzled out.
But things could get interesting—activist investor Starboard Value just acquired a $1 billion stake in the company.
Could this signal a turning point for the pharma giant?
Starboard To The Rescue?
Starboard Value, led by Jeff Smith, isn't shy about shaking things up. The fund has taken a front-row seat in Pfizer's boardroom drama, enlisting ex-Pfizer heavyweights Ian Read and Frank D'Amelio to help revitalize the company's sagging fortunes.
Starboard is no stranger to taking control and pushing for value, having previously pressured giants like Salesforce Inc CRM and Bristol-Myers Squibb Co BMY.
Pfizer's stock performance has been far from thrilling this year, with shares down 3.87% year-to-date.
In contrast, the S&P 500 has surged over 21%, making Pfizer look like the laggard of the pack. Starboard's involvement might be the catalyst Pfizer needs, but investors should be cautiously optimistic.
Read Also: Pfizer Divests $3.3B Stake In Sensodyne Toothpaste And Panadol Painkiller Maker Haleon
The Charts Say It's Bearish—For Now
Pfizer's stock charts aren’t painting a rosy picture. The stock is sitting below its five-, 20- and 50-day exponential moving averages (EMAs), signaling a strong bearish trend.
Chart created using Benzinga Pro
The eight-day simple moving average (SMA) is $28.72, while the stock lingers at $28.58—a clear bearish signal.
The 200-day SMA, however, tells a slightly different story, coming in at $28.17. With Pfizer's share price slightly above that long-term average, there's a glimmer of hope for a bullish reversal.
Chart created using Benzinga Pro
Pfizer stock’s Moving Average Convergence/Divergence (MACD) is negative 0.14, reinforcing the bearish momentum.
However, its Relative Strength Index (RSI) stands at 42.63, suggesting that while the stock has faced selling pressure, it hasn't yet reached oversold conditions. Unless momentum shifts further downward, a rush of buyers may remain uncertain.
What's The Buzz With Starboard?
Starboard's game plan could be just what Pfizer needs to turn the tide. With Pfizer's COVID-19 products no longer dominating, the company has shifted its focus toward oncology, betting big on cancer treatments. Pfizer spent $43 billion on the cancer drugmaker Seagen, banking on its pipeline to generate blockbuster medicines.
Yet, the market remains skeptical. The big question: Can Pfizer replicate its COVID-19 mRNA success in the battle against cancer? Only time will tell. For now, the company’s oncology efforts are more of a long-term bet than an immediate fix.
Waiting For A Turnaround
Technically, Pfizer is in bearish territory, but with Starboard’s recent move and a strategy shift towards oncology, the stock could be gearing up for a turnaround. Investors should keep a close eye on the $1 billion infusion from Starboard and whether their playbook sparks bullish momentum. F
or now, the stock remains under pressure, but a rebound might be lurking on the horizon.
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