Drug manufacturer Pfizer (PFE) is down 16% over the past year, but shares have been in an uptrend since April. One trader sees shares trending higher through next spring.
That’s based on the March 2025 $34 calls. With 234 days until expiration, 9,332 contracts traded compared to a prior open interest of 252, for a 37-fold rise in volume on the trade. The buyer of the calls paid $1.48 to make the bullish bet.
Pfizer shares recently traded for just under $31, so they would need to rise by $3, or just under 10%, for the option to move in-the-money. The strike price is well under Pfizer’s 52-week high of $37.19.
Pfizer is coming off a rough year, with earnings down 43% and revenues off by 20%. The company is working on a new pipeline of drugs to replace the lost income from declining Covid-related treatments.
Following this underperformance, Pfizer trades at 13 times forward earnings.
Action to take: Investors may like shares here, as they’re cheap, and in an uptrend. Shares can likely see double-digit returns through the end of the year. Pfizer also pays a 5.6% dividend at current prices.
For traders, the March 2025 $34 calls have plenty of time for a long-term uptrend to play out. At their current prices, the calls can likely see high double-digit returns or better in the months ahead.
Disclosure:
The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
