Pfizer: I Should Have Sold Earlier (Downgrade)
Summary
- I downgrade Pfizer to 'Strong Sell' as its high dividend yield fails to offset persistent share price weakness and lack of upside.
- Switching from DDM to DCF valuation reveals Pfizer is fairly valued with no growth prospects, given EPS stagnation and patent cliff risks.
- Despite management's cost-cutting and a large drug pipeline, revenue growth remains uncertain, and future free cash flow margins are likely to decline.
- Investors should seek better opportunities in high-quality dividend stocks that offer both yield and share price appreciation.
Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.
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