PFE has a history of mixed post-earnings reactions
Blue-chip pharmaceutical concern Pfizer Inc. (NYSE:PFE) is scheduled to report third-quarter earnings before the market opens on Tuesday, Oct. 27. It's purely coincidental that PFE will report a week before one of the most anticipated elections in U.S. history, especially after U.S. President Donald Trump made comments about an effective COVID-19 vaccine being ready before the election -- comments that Pfizer's CEO refuted concerning its own vaccine. Below, we'll take a look at Pfizer stock's technical setup, as well as its earnings history ahead of an important two week slate.
Although its a notable contender in the race to produce an effective coronavirus vaccine, Pfizer has struggled with its year-to-date breakeven point all 2020. There's support emerging at the $36 area, but overhead $39 --which roughly coincides with that aforementioned year-to-date level -- has stymied PFE's most recent breakout attempts in July and October.
Optimism is growing in the options pits, where calls are popular. This is per the blue chip's 10-day call/put volume ratio of 10.97 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which is two percentage points from an annual high. In other words, calls are being ordered up at a quicker-than-usual rate in the last two weeks.
PFE has a history of mixed responses following earnings, closing higher in four of the past eight quarters. This includes a 3.9% jump last July, but also a 5% drop last January. Over the past two years, shares have swung an average of 2.9% the day after earnings, regardless of direction. This time around, the options market is pricing in a slightly higher swing of 5.8%.