Title: Relationship between Nifty and Pfizer
Author: Purva Ashok Joshi
Introduction-
Pfizer Inc. is an American multinational pharmaceutical and biotechnology corporation headquartered at The Spiral in Manhattan, New York City. The company was established in 1849 in New York by two German entrepreneurs, Charles Pfizer and his cousin Charles F. Erhart.
Pfizer develops and produces medicines and vaccines for immunology, oncology, cardiology, endocrinology, and neurology. The company’s largest products by sales are the Pfizer–BioNTech COVID-19 vaccine ($37 billion in 2022 revenues), Nirmatrelvir/ritonavir ($18 billion in 2022 revenues), Apixaban ($6 billion in 2022 revenues), a pneumococcal conjugate vaccine ($6 billion in 2022 revenues), and Palbociclib ($5 billion in 2022 revenues).[1] In 2022, 42% of the company’s revenues came from the United States, 8% came from Japan, and 50% came from other countries.
Pfizer was a component of the Dow Jones Industrial Average stock market index from 2004 to August 2020. The company ranks 38th on the Fortune 500 and 39th on the Forbes Global 2000.
Objective-
To calculate Beta and its significance
Views & Review-
Dr. Albert Bourla, Chairman & CEO, Pfizer stated that, Pfizer’s product portfolio remains strong. In 2024, Comirnaty and Paxlovid are expected to deliver combined revenues of approximately $8 billion and the company’s remaining portfolio of combined Pfizer and Seagen products is expected to achieve year-over-year operational revenue growth in the range of 8% to 10%. In addition, the company is expecting their cost realignment program to deliver savings of at least $4.0 billion by the end of 2024, which puts on a path to potentially regain our pre-pandemic operating margins.
According to Meenakshi Nevatia, President & MD, Pfizer India Ltd., stated that manufacturing, sales and research and development will grow, though parent has plans to cut costs.
Board of Directors approves increase in quarterly cash dividend to $0.42 per share increase in the quarterly cash dividend on the company’s common stock to $0.42 for the first-quarter 2024 dividend, payable March 1, 2024, to holders of the Common Stock of record at the close of business on January 26, 2024. The first-quarter 2024 cash dividend will be the 341st consecutive quarterly dividend paid by Pfizer.
Data Collection-
The data is downloaded from the website nseindia.com. The data was extracted for the period 1-10-2022 to 30-09-2023, and the entire data except the data and closing price for the end of the week were excluded. The returns were calculated with the previous week’s return as the base.
Weekly returns of Nifty= x
Weekly returns of Pfizer Inc.=y
Linear regression was carried out.
Data Analysis-
The regression equation is:
Pfizer Inc.= 0.184888 + (-0.22577)Nifty
The above equation shows the relationship between Pfizer and Nifty Index. Equity is the independent variable and Nifty is the dependent variable. However, the model only explains a moderate amount of the variance in the dependent variable. The correlation is
-0.14221.. The negative sign indicates that, if Nifty rises Equity will decrease, and vice versa. If Nifty rises one unit i.e., Nifty rises by one rupee then Equity will decrease by 34% paise. t-stat for b (co-efficient of Nifty) is -0.98496
and the p-value is 0.329685. Number of observations are 50. P-value is 0.329685
Conclusion- Beta is -0.226
Since Beta is -0.226, it is advisable not to invest for a long time as it is more volatile
References-
https://www.nseindia.com/reports-indices-historical-index-data
https://www.nseindia.com/get-quotes/equity?symbol=PFIZER