Pfizer: Sell-Off Overdone, Healthy Pipeline To Sustain Above 15% ROE

Summary:

  • We assess the key factors driving the persistent decline in the share price of Pfizer, one of the world’s leading biopharmaceutical companies.
  • We think the stock deserves to trade at a much higher P/E multiple of 20x or more, given its healthy pipeline and industry-leading R&D capabilities.
  • Based on our conservative annualized EPS target of $2.68 and a 20x P/E multiple, we expect Pfizer’s shares to outperform in the next 12 to 18 months.
  • We initiate coverage of PFE with a “Strong Buy” rating.

Chancellor George Osborne Visits Pharmaceutical Company Pfizer

Dan Kitwood

By now, investors should have become quite familiar with various commentaries criticising how the equity bull market has been lacking in breadth. While some investors may see this as a reason to stay on the sidelines, we prefer to stay


Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in PFE, XLV, IHE, XPH over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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