Market analysis
Invest Ideas

Pfizer | First Impressions Can Be Misleading

Current Price: $27.7
Predicted Price: $32.6
Growth Potential: 17.7%🔥
Dividend Yield: 6.1%💵
Investment Horizon: 1 year

Pfizer, one of the world's leading pharmaceutical companies, experienced a significant boost during the COVID-19 pandemic. However, as the demand for vaccines and related drugs has decreased, this has impacted financial results and stock prices. Pfizer's stock has dropped by more than 50% from its 2021 highs, presenting a compelling valuation. The fair value of the shares is estimated at $32.6, indicating a potential upside of 17.7%. The current dividend yield stands at 6.1%.

Investment Theses

🔼 Attractive Valuation
Pfizer's Q1 2024 report might seem disappointing at first glance, with a 21% YoY decline in revenue to $14.9 billion and a 43.3% drop in net earnings per share (EPS) to $0.55. However, these results are largely due to the decreased sales of COVID-19 treatments. Excluding these, revenue actually increased by 11% YoY. Additionally, Pfizer has raised its profit and revenue forecasts for the entire year of 2024. The market currently values the company at just 12 times its expected annual earnings, which is lower than the sector average.

🔼 Dividends and Share Buybacks
Pfizer has consistently increased its dividend payments for the past 13 years. The company now pays $0.42 per share quarterly, translating to a 6.1% dividend yield. This yield surpasses that of the 10-year Treasury note.

🔽 Risks
Pfizer faces the expiration of patents on several of its popular drugs in the coming years, potentially leading to decreased sales. However, the company has developed a new line of drugs with high sales potential.

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The information provided above is not an investment recommendation and does not guarantee or promise profitability. Before investing, you should assess the potential risks and rewards and determine your willingness and ability to accept such risks.

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