PFE  Pfizer Inc.

Exchange

NYSE

Sector

Consumer Durables

Industry

Major Pharmaceuticals

Market Cap.

211.07B

Vuru Grade

57.06/100

Current Price

$35.49
+0.43 (+1.23%)

Growth Price

$24.94
Overvalued by 29.73%

Stability Price

$8.04
Overvalued by 77.34%

Company Metrics

  • P/E 25.96
  • P/S 3.98
  • P/B 3.57
  • EPS 1.37
  • Cash ROIC 12.61%
  • Cash Ratio 0.57
  • Dividend 1.28 / 3.6%
  • Avg. Vol. 17.23M
  • Shares 5.95B
  • Market Cap. 211.07B

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 Inc. (PFE) Closes 1.02% Up on the Day for December 12
Equities.com - 10 hours ago
Shares of Pfizer Inc. (PFE) ended the trading day Tuesday at $36.58, representing a move of 1.02%, or $0.37 per share, on volume of 21.91 million shares.
Better Buy: Pfizer Inc. vs. Johnson & Johnson
Motley Fool - Dec 1, 2017
Johnson & Johnson has its own challenges, with sales for its top-selling drug Remicade declining due to biosimilar competition (including Pfizer's Inflectra). J&J's consumer segment also has sluggish sales growth. Overall, though, J&J's revenue growth ...
Pfizer Inc. is looking to fill 200 new positions in Portage
MLive.com - Nov 13, 2017
PORTAGE, MI - Pfizer Inc. is looking to fill 200 new skilled trades, engineering and manufacturing jobs. The jobs are related to work that is ongoing at its mammoth pharmaceutical manufacturing plant at 7000 Portage Road, as well as the expansion it ...
Viagra goes generic: Pfizer to launch own little white pill
Chicago Tribune - Dec 6, 2017
Pfizer's early TV ads for the little blue pill even coined the term erectile dysfunction, ED for short. Eli Lilly's Cialis came out in 2003 and now dominates the U.S.
Pfizer Inc. (PFE) Holdings Boosted by Stanley Laman Group Ltd.
The Ledger Gazette - 16 hours ago
Pfizer logo Stanley Laman Group Ltd. grew its position in shares of Pfizer Inc. (NYSE:PFE) by 373.7% during the second quarter, according to its most recent Form 13F filing with the Securities & Exchange Commission.
Stock Showing Surging Activity: Pfizer Inc. (PFE) - FactsReporter
Pfizer Inc. (PFE) Closes 1.32% Up on the Day for December 11 - Equities.com
Pfizer Inc. Announces (i) Private Exchange Offer for its 6.500 per cent. Notes ...
Business Wire (press release) - Dec 7, 2017
NEW YORK--(BUSINESS WIRE)--Pfizer Inc. (NYSE:PFE) (“Pfizer”) today announced that it has commenced a private offer to exchange (the “Exchange Offer”) any and all of its outstanding £1,500,000,000 6.500 per cent.
Earnings Clues on Pfizer Inc. (PFE), AK Steel Holding Corporation (AKS ...
StockNewsJournal - 18 hours ago
Pfizer Inc. (PFE) have shown a high EPS growth of 3.30% in the last 5 years and has earnings rose of 5.20% yoy. Analysts have a mean recommendation of 2.50 on this stock (A rating of less than 2 means buy, “hold” within the 3 range, “sell” within the 4 ...
Stock-research Ratings: Pfizer Inc. (PFE), AK Steel Holding Corporation (AKS) - Analyst Journal
BRIEF-Pfizer Inc Announces Private Exchange Offer For Its 6.500 Per Cent Notes ...
Reuters - Dec 7, 2017
... * PFIZER INC. ANNOUNCES (I) PRIVATE EXCHANGE OFFER FOR ITS 6.500 PER CENT. NOTES DUE 2038 OPEN TO CERTAIN INVESTORS AND RELATED TENDER OFFER OPEN TO ALL INVESTORS AND (II) TENDER OFFER FOR ITS 5.750 PER CENT.
Townsfolk near Viagra factory talk of 'love fumes,' but Pfizer says that's a ...
Kansas City Star - Dec 10, 2017
In the tiny village of Ringaskiddy on the southwestern coast of Ireland, the locals love to breathe in the factory air - deeply. The Cork County town has long been the site for a Pfizer Inc. plant that manufactures Viagra, and that has given rise to ...
Why It's Time to Put Pfizer Inc. Stock on Your Watchlist
Investorplace.com - Nov 17, 2017
Ever since its cholesterol-fighting drug Lipitor lost the crux of its patent protection back in 2011, Pfizer Inc. (NYSE:PFE) investors have approached PFE stock with caution.
Pfizer Inc. (PFE) Closes 0.53% Down on the Day for November 17 - Equities.com
Short Interest in Pfizer, Inc. (NYSE:PFE) Rises By 19.0% - The Ledger Gazette
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.

$35.49 Current Price

$24.94 Growth Price (DCF)

Overvalued by 29.73%


Growth Rate Assumed by Market: 13.11%


Future Free Cash Flow Growth Rate: -0.2%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$8.04 Stability Price (EPV)

Overvalued by 77.34%


Discount Rate: 15.0%

$22.00 Book Price

Overvalued by 38.00%


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