Is Pfizer a buy after pullback? The breakdown.
Let’s talk about another great large biotech company, $PFE otherwise known as Pfizer.
Current Price: $32.70
52/Wk High: $44.561
52/Wk Low: $27.88
Read below for the breakdown.
$PFE is changing at a rapid rate. After the new CEO Albert Bourla came along not long ago the company is on to making deals, increasing its focus, and building a stronger portfolio.
Pfizer’s current strengths are in cardiovascular solutions, oncology, inflammation & immunology, vaccines, rare diseases, and much more.
In 2019 Pfizer made several deals. The first deal was with GlaxoSmithKline in which both companies partnered to form the GSK Consumer Healthcare Joint Venture. $PFE sustains 32% of the deal.
The first deal focuses on over the counter drugs and has huge scalability in the future. Currently, it’s reported $12 billion in sales, which is a great sign.
The second large deal Pfizer made in 2019 was the acquisition of Array Biopharma for a large $11 billion. Array is a small molecule and cancer-focused biotech.
Pfizer continued the pursuit of approval for Array’s Braftovi, which has received FDA approval for combination with Erbitux. The acquisition so far has brought sales of $37 million in Q1, an increase from $35 million, but long term is very promising.
The final deal Pfizer made was to combine both generic drugmakers Mylan and their generic segment Upjohn. The merger between the two companies will form a joint venture called Viatrias.
According to experts, the Mylan and Upjohn deal will create $12 billion in cash for Pfizer, which can be used to balance the company on the financial end.
Pfizer is a company with both positives and negatives at the moment. Currently, $PFE has 21 drugs in phase 3 trials. In total six are ready for approval but only two build completely new therapies (fool.com)
On the bright side, one of the company’s core drugs, Eliquis saw revenue growth of 29% in the first-quarter report.
Given the positives and negatives so far its time to get into the financial standing of Pfizer. The company reported a Q1 earnings beat with an excellent $0.80 EPS versus the expected $0.73 EPS. Pfizer also reported a revenue of $12.7 billion for the first quarter and a whopping $50.7 billion trailing 12-month revenue.
The company is also well-positioned for any oncoming headwinds, with a huge $10.350 billion cash on hand position as of March 31, representing an unfortunate 10.92% decline in cash.
Analysts are bullish on $PFE. The current average price target is $40.66/share representing a 24.34% upside. Secondly, the high price target is $53.00/share and the low is $35.00/share, so analysts are widely in agreement.
Analysts are not the only ones bullish on Pfizer though. The big money is also very bullish with 71.74% being owned by institutions. The largest owners consist of the Vanguard Group, Blackrock, and State Street Corp.
Finally, $PFE has a sufficient dividend at the moment of $0.38 and a 4.65% yield. Although, the dividend could be at risk short term due to the stress of three large deals.
In all I very much like Pfizer. I think the stock has the potential to run up to its average price target this year. Secondly, it has pulled back some, revealing a good buying point in my opinion. Long term I think it is a great investment.
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Disclaimer: This is not direct financial advice, simply opinion based on independent research.