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Pfizer Inc PFE

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Stock XNYS Rating as of
$28.63 −0.16 (0.56%)
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Pfizer: Disappointing Clinical Data for Obesity Drug Leads to Minor Fair Value Estimate Cut

Damien Conover

We are lowering our Pfizer fair value estimate to $47 per share from $48 based on the disappointing phase 2 obesity study with danuglipron. We believe the unfavorable side effect profile (up to 73% rate of nausea) shown in the study would make the drug less competitive. While Pfizer is still evaluating the drug by formulating the dosing for once daily instead of twice daily, it will not move the drug forward into phase 3 development at the twice-daily dose. Given the setback, we believe the probability of success for the drug is lower, and we have significantly lowered our assumed peak annual sales potential from over $3 billion to less than $1 billion.

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Price vs Fair Value

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PFE is trading at a 39% discount.
Price
$28.63
Fair Value
$42.00
Uncertainty
Medium
1-Star Price
$74.74
5-Star Price
$23.20
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Pfizer's pipeline productivity is improving with several successful recent drug launches. In particular, cardiovascular drug Vyndaqel is a potential game-changer in the rare-disease arena.

Bears

Past aggressive cost-cutting in research and development could hurt Pfizer's long-term prospects, given the importance of continued investment in innovation.

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Trading Information

Previous Close Price
$28.79
Day Range
$28.50–28.90
52-Week Range
$28.30–54.93
Bid/Ask
$28.62 / $28.63
Market Cap
$161.66 Bil
Volume/Avg
35.8 Mil / 31.2 Mil

Key Statistics

Price/Earnings (Normalized)
9.98
Price/Sales
2.39
Dividend Yield
5.73%
Dividend Yield (Forward)
5.73%
Total Yield
5.73%

Company Profile

Pfizer is one of the world's largest pharmaceutical firms, with annual sales close to $50 billion (excluding COVID-19 product sales). While it historically sold many types of healthcare products and chemicals, now prescription drugs and vaccines account for the majority of sales. Top sellers include pneumococcal vaccine Prevnar 13, cancer drug Ibrance, and cardiovascular treatment Eliquis. Pfizer sells these products globally, with international sales representing close to 50% of total sales. Within international sales, emerging markets are a major contributor.
Sector
Healthcare
Industry
Drug Manufacturers - General
Stock Style Box
Large Value
Total Number of Employees
83,000
Website
https://www.pfizer.com

Competitors

Valuation

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Metric
PFE
LLY
MRK
Price/Earnings (Normalized)
 9.9873.6233.62
Price/Book Value
 1.6749.776.39
Price/Sales
 2.3916.574.46
Price/Cash Flow
 8.3977.5913.31
Price/Earnings
PFE
LLY
MRK

Financial Strength

Metric
PFE
LLY
MRK
Quick Ratio
 1.900.580.83
Current Ratio
 2.381.051.38
Interest Coverage
 6.0514.877.59
Quick Ratio
PFE
LLY
MRK

Profitability

Metric
PFE
LLY
MRK
Return on Assets (Normalized)
 8.04%10.19%7.38%
Return on Equity (Normalized)
 16.96%49.42%18.18%
Return on Invested Capital (Normalized)
 11.79%19.29%10.92%
Return on Assets
PFE
LLY
MRK

Drug Manufacturers - General Industry Comparables

Screen in Investor
Ticker
Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
LLY
Eli Lilly and CoFqyy$558.4 Bil
JNJ
Johnson & JohnsonWgs$374.1 Bil
MRK
Merck & Co IncZjf$263.2 Bil
ABBV
AbbVie IncDfvxyt$261.2 Bil
RHHBY
Roche Holding AG ADRFnqk$229.6 Bil
NVS
Novartis AG ADRTsjw$198.0 Bil
AZN
AstraZeneca PLC ADRLdk$197.7 Bil
AMGN
Amgen IncWmfm$145.2 Bil
SNY
Sanofi SA ADRBjyl$116.6 Bil