Should You Buy Pfizer (PFE) Stock Before August 5? Here’s What History Says

Pfizer (PFE -0.36%) has been around for over 175 years, but it became a true household name during the COVID-19 pandemic as one of the main vaccine suppliers. That led to its stock price and revenue skyrocketing, and even brought Pfizer’s market cap to over $340 billion at one point.

Since its late-2021 peak, Pfizer’s stock is down over 60%. In the past three years, it’s off by 52%, even while beating its earnings per share (EPS) estimates in all 12 reported earnings in that time.

Pfizer will report its fiscal second-quarter earnings on Aug. 5. Although we won’t know if it’ll continue its beats streak until then, it’s probably not a good idea to try to time your investment around the date. Let’s take a look at why.

There’s no correlation between Pfizer’s earnings and immediate stock price moves

You would think that a company beating its earnings estimates would excite investors and lead to positive stock price movements, but that’s unfortunately not how the stock market operates. Other factors influence stock price movements — such as future guidance, the macroeconomic environment, and overall investor sentiment — so focusing on earnings alone can misguide you.

Even with Pfizer’s consistency in beating earnings estimates, history has shown that this hasn’t always sent its stock price up. The table below shows its next-day stock price movements after earnings reporting.

Data sources: AlphaQuery and YCharts.

Regardless of the company, it’s helpful to remember this: It’s never a good idea to try to time the market, because the market doesn’t behave rationally — at least, in the short term.

Pfizer is a good value opportunity

If you’re looking for reasons to invest in Pfizer, they shouldn’t revolve around its upcoming earnings date. Instead, invest because of its cheap valuation and ultra-high dividend yield.

Pfizer is currently trading at 8 times its forward earnings, which is less than competitors like Johnson & Johnson, AbbVie, and Eli Lilly, and far below the S&P 500 healthcare sector’s 16.5 average.

PFE PE Ratio (Forward) data by YCharts.

Pfizer’s stock has lagged behind the overall market, but this low valuation gives it more long-term upside than downside, in my opinion. We can’t predict how its stock will perform in the near-term, but its 7% dividend yield (as of July 29) is a great incentive to keep investors patient.

If you’re in on Pfizer for the long term, now seems like a good opportunity to begin a stake (or increase your current shares). But if you’re looking to make some quick cash from a potential post-earnings swing, you’re essentially gambling.