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Pfizer At Attractive Valuation

Mar. 08, 2020 4:54 PM ETPfizer Inc. (PFE)VTRS18 Comments


  • YOY Pfizer is down on revenues and cash flow, stock price reflecting such.
  • Guidance lowered for 2020, but operations becoming streamlined.
  • Coronavirus fears affecting overall market and will continue to draw down share price.
  • Strong dividend for pharmaceutical company that will continue payouts.

2019 Earnings

Pfizer (NYSE:PFE) has fallen considerably over the last few months due to uncertainty of business and most recently a miss on Q4 earnings that has been a driving factor in the company's nearly 20% decline in share price since January 28 when they were released.

Stock Chart(Source: Stockcharts.com)

The adjusted earnings of $3.11 billion for Q4 were a bit off of estimates at $3.24 billion on revenues of $12.69 billion (-9.2% YOY). Losing exclusivity on critical drugs, Pfizer business took a major hit that is reflective of it.

Full year 2019 revenues dropped to $51.8 billion, reflecting a 1% operational decline represented through a 8% operational growth from Biopharma division countered by a 16% decline in operational revenues from Upjohn.

The key to focus on here is the growing Biopharma division that is remaining after the Upjohn spin-off with Mylan (MYL). With impressive growth and Pfizer now concentrating on the Biopharma business, the future is looking up.

2020 Guidance

The guidance provided by Pfizer has investors concerned. Loss of revenues in Upjohn and losing market exclusivity for Lyrica have had a detrimental effect on the share price.

Pfizer expects its adjusted earnings per share to be roughly $2.87 with guidance for the revenue is projected to be approximately $49.5 billion. However, the company is taking a more streamlined approach and focus towards the Biopharma division. The soft guidance is projecting a decline overall from the company's output, but it will be interesting to see how the new focus plays out over 2020.

Technical Analysis

PFE(Source: Trading View)

At $35, the share price is sitting at a key level that has been in place for the past 2 years. The company has been trading in a fairly volatile range trending upwards since 2013, making 10%+ gains over weeks followed by losses. Recently, we saw a major market

This article was written by

Scientia Equity Research (Previously "Biotech Buys") is dedicated to providing an in-depth analysis of publicly traded companies within the biotechnology industry who have upcoming FDA events and deadlines.  I will focus on under-covered companies throughout the pharmaceutical and biotech industries, providing both long and short ideas.

Analyst’s Disclosure: I am/we are long PFE. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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