Pfizer Hitting On All Cylinders: Beats Earnings, Raises Guidance, Provides 4% Yield

| About: Pfizer Inc. (PFE)

It has been a rocky start to the trading week as news out of Europe has been pummeling U.S. markets. It is in times like these, especially after a huge rally in October, that it pays to be cautious.

One defensive stock that posted earnings and guidance that beat estimates Tuesday that looks to be a good pickup if it sells off along with the overall market is Pfizer (NYSE:PFE).

Key data points from the just released earnings report:

  • Management upped its financial targets for 2011 to the top end of the consensus range.
  • Pfizer easily beat expectations on both revenue and EPS where it beat by 7 cents a share after non-recurring items.
  • Pfizer also widened its planned share repurchased program by $2B.
  • It is launching a generic version of Lipitor, it largest selling drug whose patent expires by the end of the quarter.
  • Sales of pneumococcal vaccine Prevnar 13 rose 37% to $1 billion, while sales of anti-inflammatory drug Enbrel were up 20% at $957 million.

5 reasons Pfizer is a solid value at $19 a share:

  1. PFE has an AA rated balance sheet, a low beta (.70) and yields 4%.
  2. Pfizer is selling near the bottom of its five year valuation range based on P/B, P/E, P/S and P/CF.
  3. Analysts have consistently been low in their earnings estimates on PFE. The company has beat EPS estimates 11 of the last 12 quarters.
  4. Pfizer is selling at less than 8.5 times its forward PE and less than 7 times operating cash flow.
  5. The stock is selling under analysts’ price targets. S&P has a price target of $24 on PFE and the median analysts’ price target on Pfizer is $23.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in PFE over the next 72 hours.