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Strong Drug Pipeline Bolsters Undervalued Pfizer

The wide-moat firm is going through a paradigm shift, but it is well-positioned for growth.


Damien Conover: When we look at the large pharmaceutical market right now, one of the companies we really like as being undervalued is Pfizer. Pfizer is, I think, going through a paradigm shift. If you think about the company many years ago, it was facing a lot of patent losses. If you look at the company today, we look at the growth rate improving significantly. The patent losses aren't going to be as significant.

In tandem with this, Pfizer also has a great pipeline that's much stronger than it's been in many years focused on oncology products, immunology products, products that carry very strong pricing power. In the backdrop of this, the bottom-line earnings we anticipate will continue to grow robustly to support a very strong dividend yield over the next several years.

Damien Conover does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.