PFE  Pfizer Inc.

Exchange

NYSE

Sector

Consumer Durables

Industry

Major Pharmaceuticals

Market Cap.

215.21B

Vuru Grade

57.06/100

Current Price

$36.19
-0.0543 (-0.1498%)

Growth Price

$24.94
Overvalued by 31.08%

Stability Price

$8.04
Overvalued by 77.78%

Company Metrics

  • P/E 26.4709
  • P/S 4.1174
  • P/B 3.6942
  • EPS 1.367
  • Cash ROIC 12.61%
  • Cash Ratio 0.57
  • Dividend 1.28 / 3.54%
  • Avg. Vol. 17.07M
  • Shares 5.95B
  • Market Cap. 215.21B

Company Description

Pfizer Inc., a biopharmaceutical company, offers prescription medicines for humans and animals worldwide. The company's Biopharmaceutical segment's provides Lipitor for elevated LDL-cholesterol levels in the blood; Enbrel for rheumatoid arthritis, polyarticular juvenile rheumatoid arthritis, psoriatic arthritis, plaque psoriasis, and ankylosing spondylitis; Lyrica for post-herpetic neuralgia, diab... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Pfizer's Big Deal Still Elusive as Company to Shed Consumer Unit
Bloomberg - Oct 10, 2017
This isn't the first time the U.S.'s biggest drugmaker has flirted with breaking off parts of itself. In 2013, Pfizer spun out its animal health business into Zoetis Inc. through a stock offering, months after selling its infant nutrition business to ...
Pfizer Reviewing Strategic Alternatives for Consumer Healthcare Business - Business Wire (press release)
Pfizer gets its PILOT, will 'proceed aggressively' to next steps
Memphis Business Journal - Oct 18, 2017
Pfizer Inc. may have a 14-year job retention PILOT on lock, but it still needs to finalize a lease for its new East Memphis offices.
Why Pfizer is set to land a $5.3 million local tax break — without building ...
Memphis Business Journal - Oct 17, 2017
Pfizer Inc., which has had Global Financial Services (GFS) operations located in Memphis since 2001, is in line to receive a $5.3 million, 14-year local tax break to keep those operations in Memphis from the Economic Development Growth Engine (EDGE ...
Pfizer: Growth Trajectory Locked, Ready For Launch
Seeking Alpha - Oct 9, 2017
Pfizer underwent a period of revenue decline due to the loss of exclusivity on several of its blockbuster drugs. During this challenging period, Pfizer managed to maintain expenses under control and successfully develop its pipeline. The company is now ...
Pfizer Inc. (PFE) Closes 1.14% Up on the Day for October 19
Equities.com - 22 hours ago
Shares of Pfizer Inc. (PFE) ended the trading day Thursday at $36.24, representing a move of 1.14%, or $0.41 per share, on volume of 19.6 million shares.
Pfizer Inc. (PFE) Technical Analysis 20/10/2017 - StockNewsGazette
Zacks Investment Research Downgrades Pfizer, Inc. (PFE) to Hold - The Ledger Gazette
Pfizer's Ibrance To Rally Share Price Past $40
Seeking Alpha - Sep 25, 2017
Shares of Pfizer Inc. (NYSE:PFE) are finally starting to catch a bid which is encouraging. Shares have been pretty much range bound for the past 24 months or so but finally broke through $36 a share last week which looks significant.
Pfizer Inc. (PFE) Closes 1.25% Down on the Day for September 25 - Equities.com
What the Technicals Say About Pfizer Inc. (PFE) - Economic News
In A First, Pfizer Spins Out Biotech Firm With $103 Million In Funding
Forbes - Sep 25, 2017
Pfizer is announcing today that it is spinning out a new company, SpringWorks Therapeutics, to develop several drugs for rare diseases that the drug giant did not want to move forward internally.
Pfizer Spins Off New Firm for Some Rare Disease Drugs - Bloomberg
Pfizer-spawned Springworks secures $103M for 'alternative development approach' - BioWorld Online
Amazon, Pfizer Seek Incentives for Projects
Memphis Daily News - Oct 16, 2017
The EDGE board also will hear a PILOT request from pharmaceutical giant Pfizer Inc. on Wednesday. While admitting that its workforce in Memphis has been declining due to technology and business changes, Pfizer is seeking a 14-year PILOT to retain its ...
Pfizer: A Good Buy
Seeking Alpha - Oct 2, 2017
The reason why I like Pfizer is because the company can pass a long list of my personal strict screening criteria. I quite often divide this screening process into two simple steps.
Pfizer Inc. (PFE): From Top to Bottom - StockNewsJournal
Pfizer Inc. (PFE) Closes 0.19% Up on the Day for October 03 - Equities.com
Pfizer looks to relocate office to E. Memphis in $19.6M investment
Memphis Business Journal - Oct 13, 2017
Pfizer Inc., the $52 billion pharmaceutical company, is asking for a $5.3 million, 14-year local tax break. The company would use the incentive to make a $19.68 million capital investment as part of moving its Memphis office to Boyle Investment Co.
Pfizer Seeks Incentives to Retain Financial Services Operations in Memphis - Memphis Daily News
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for PFE to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate PFE's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$36.19 Current Price

$24.94 Growth Price (DCF)

Overvalued by 31.08%


Growth Rate Assumed by Market: 13.76%


Future Free Cash Flow Growth Rate: -0.2%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$8.04 Stability Price (EPV)

Overvalued by 77.78%


Discount Rate: 15.0%

$22.00 Book Price

Overvalued by 39.19%


Satisfactory Cash Return on Invested Capital over the past 5 years

PFE has somewhat efficiently invested its financial resources in buildings, projects, and equipment. If CROIC is inconsistent, it's likely PFE could be benefiting from a one-time event or has a mixed history of investing capital productively. Read the company's Annual Report to determine whether this can improve.

PFE has created $12.61 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 15.73B 16.30B 15.30B 13.02B 13.90B
divided by
Invested Capital 124.47B 116.33B 111.52B 114.77B 122.65B
Cash ROIC 12.64% 14.01% 13.72% 11.34% 11.33%

Excellent Return on Equity over the past 5 years

Over the past 5 years, PFE has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

PFE has generated $16.54 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 14.60B 22.07B 9.17B 6.99B 7.25B
divided by
Stockholders' Equity 81.26B 76.31B 71.30B 64.72B 59.54B
Return on Equity 17.96% 28.93% 12.86% 10.79% 12.17%

Excellent Business Performance over the past 10 years

PFE has been able to maintain profitability in good times and bad. This could mean PFE has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

PFE has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 11.47B 16.54B 15.38B 9.94B 18.58B 15.73B 16.30B 15.30B 13.02B 13.90B

Weak Balance Sheet

PFE's financial position is not ideal. The key is to check whether PFE is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 25.48B 23.73B 25.97B 28.01B 26.76B 32.71B 32.41B 36.12B 23.29B 17.85B
Current Assets 46.85B 43.08B 61.67B 60.47B 57.73B 61.42B 56.24B 57.70B 43.80B 38.95B
Total Assets 115.27B 111.15B 212.95B 195.01B 188.00B 185.80B 172.10B 169.27B 167.46B 171.62B
Current Liabilities 21.84B 27.01B 37.23B 28.61B 28.07B 28.62B 23.37B 21.63B 29.40B 31.12B
Total Liabilities 50.26B 53.59B 122.94B 107.20B 105.81B 104.54B 95.79B 97.97B 102.74B 112.07B
Stockholder' Equity 65.01B 57.56B 90.01B 87.81B 82.19B 81.26B 76.31B 71.30B 64.72B 59.54B
Current Ratio 2.15 1.59 1.66 2.11 2.06 2.15 2.41 2.67 1.49 1.25
TL-to-TA 0.44 0.48 0.58 0.55 0.56 0.56 0.56 0.58 0.61 0.65

Low or No Reinvestment of Profits over the past 10 years

PFE has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to PFE operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 49.66B 49.14B 40.43B 42.72B 46.21B 54.24B 69.73B 72.18B 71.99B 71.77B
Retained Earnings Growth - -1.04% -17.74% 5.66% 8.18% 17.38% 28.56% 3.51% -0.25% -0.30%

Inconsistent Net Profit Margins over the past 10 years

PFE potentially has a competitive advantage, however inconsistent profit margins are a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$19.21 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 8.14B 8.10B 8.64B 8.29B 10.05B 14.60B 22.07B 9.17B 6.99B 7.25B
divided by
Revenue 48.42B 48.30B 50.01B 67.81B 67.43B 58.99B 51.58B 49.61B 48.85B 52.82B
Net Profit Margin 16.82% 16.78% 17.28% 12.22% 14.91% 24.75% 42.79% 18.48% 14.30% 13.72%

Strong Pricing Power over the past 10 years

PFE has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. This potentially leaves flexibility in inflationary environments to raise prices on consumers and maintain profitability.

$80.45 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 37.18B 40.18B 41.12B 51.53B 58.31B 47.65B 42.00B 40.03B 39.20B 40.50B
divided by
Revenue 48.42B 48.30B 50.01B 67.81B 67.43B 58.99B 51.58B 49.61B 48.85B 52.82B
Gross Margin 76.79% 83.20% 82.23% 75.99% 86.49% 80.79% 81.42% 80.69% 80.25% 76.66%

Low Capital Intensity over the past 10 years

PFE has consistently used a small portion of their Net Income buying new equipment or investing in new facilities. This indicates that PFE may require minimal investment to stay competitive. This leaves them with extra money to spend on growing their business and potentially buying back stock.

17.48% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 1.88B 1.70B 1.21B 1.51B 1.66B 1.33B 1.47B 1.58B 1.50B 2.00B
divided by
Net Income 8.14B 8.10B 8.64B 8.29B 10.05B 14.60B 22.07B 9.17B 6.99B 7.25B
Capital Expenditure Ratio 23.08% 20.99% 13.94% 18.25% 16.52% 9.09% 6.64% 17.27% 21.41% 27.59%

Very Strong Dividend History over the past 10 years

PFE has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests PFE is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 7.98B 8.54B 5.55B 6.09B 6.23B 6.53B 6.58B 6.61B 6.94B 7.32B
divided by
Shares Outstanding 6.94B 6.75B 7.05B 8.07B 7.87B 7.51B 6.90B 6.42B 6.26B 6.16B
Dividend Paid Per Share 1.15 1.27 0.79 0.75 0.79 0.87 0.95 1.03 1.11 1.19
Price at Year End 18.59 15.36 16.86 16.61 21.42 24.89 30.69 31.38 32.75 32.48
Dividend Yield 6.18% 8.24% 4.67% 4.54% 3.70% 3.50% 3.11% 3.28% 3.39% 3.66%

Strong History of Stock Buybacks over the past 10 years

PFE has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 6.94B 6.75B 7.05B 8.07B 7.87B 7.51B 6.90B 6.42B 6.26B 6.16B
Stock Bought Back - 2.80% -4.19% -12.74% 2.59% 4.82% 8.89% 7.33% 2.67% 1.59%
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Discussion
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4
Posted by sameer  (on March 21, 2012)
For value investors, NAV is the most important followed by EPV... This company is overvalued in both.

Furthermore, its a large cap stock so there's probably a lot of investor speculation, herding and rebalancing of portfolios that is going to affect the value.

Plus the pharma market is starting to lose all their patents without putting any new drugs out ...

I wouldn't invest ...
1
Posted by Robert.T  (on March 21, 2012)
Yeah, there are definitely going to be some carcasses once this melee around patent expiration finishes.

Pfizer is an interesting case. They've been around forever and it's hard to imagine that they'll just disappear. At the same time, the facts don't look promising. For example, they recently put out a (much hyped) rheumatoid arthritis treatment and it's not so hot. 55% of doctors said it wouldn't replace drugs they currently prescribe patients. Here's the link to the full article: http://www.pharmalot.com/2012/03/pfizers-rheumatoid-arthritis-pill-not-a-slam-dunk/
1
Posted by pbanik  (on August 18, 2013)
Louis Navellier rates the stock a buy:
http://navelliergrowth.investorplace.com/portfolio-grader/stock-report.html?t=PFE
Of course, he's a growth investor, so he will be more favorable towards stocks that exhibit growth than ones who don't.

ValuePro thinks the intrinsic value of the stock is $55.03 It's trading just above half that. http://www.valuepro.net/index.shtml Enter ticker symbol PFE and then Click on Get Baseline Valuation button to the right of where you enter the ticker symbol.

I think if you can find undervalued growth stocks, you can get the best of both worlds, or better yet, dividend paying undervalued growth stocks. I think if you wait you can get in at a better entry point. The US stock market seems to be falling lately, which is why I say you can be rewarded if you wait. The quarterly earnings growth for PFE is phenomenal if you look at the numbers:
http://finance.yahoo.com/q/ks?s=PFE+Key+Statistics
The yield is above 3% right now, which is above average. If it drops under $25, I will probably initiate a position.
1
Posted by dodam85  (on May 9, 2012)
no, i don't think pfe is overvalued. Pfe is $25.34
-1
Posted by quantumcanuck  (on March 20, 2012)
This is by far the most highly rated stock of the DOW. Good pick IMO