Pfizer Inc. (DFP) A 10 mcg booster dose of the bivalent COVID-19 vaccine adapted Omicron BA.4/BA.5 for children received emergency use authorization from the United States Food and Drug Administration on October 12 2022. This endorsement is another feather in PFE’s hat. This development should boost its share price. PFE co-developed the vaccine with BioNTech (BNTX).
Moreover, in the current uncertain market conditions, PFE could cushion its portfolio thanks to its reliable dividends. PFE has paid dividends for 32 consecutive years. Its dividend payouts have grown at a CAGR of 5.9% over the past five years and at a CAGR of 5.7% over the past three years. Its current dividend yield is 3.63%, while its four-year average yield is 3.62%.
The PFE is down 4.2% over the past month and 25.3% since the start of the year to close the last trading session at $43.26. However, it has gained 6.7% over the past year.
Here’s what could shape PFE’s performance in the near term:
Strong finances
PFE’s revenue was $27.74 billion for the second quarter ended July 3, 2022, up 46.8% year-over-year. Its net income was $9.91 billion, up 78.1% year-on-year, while its EPS was $1.73, up 76, 5% year over year. Additionally, its operating income was $11.45 billion, up 64.7% year-on-year.
Attractive estimates
PFE striker EV/Sales of 2.53x is 33.5% lower than the industry average of 3.80x. Its forward EV/EBITDA of 5.56x is 57% below the industry average of 12.94x. Additionally, its 2.48x futures price/sales is 43.4% lower than the industry average of 4.38x, while its 2.50x futures price/book reserve is 1.3% lower. to the industry average of 2.53x.
Robust profit margins
Gross profit margin of 62.75% over the last 12 months of PFE is 15.2% higher than the industry average of 54.49%. Its trailing 12-month EBITDA margin of 42.97% is well above the industry average of 3.29%. Additionally, its 12-month net profit margin of 28.94% is above the negative industry average of 2.69%.
Additionally, its trailing 12-month ROCE, ROTC, and ROTA are 37.50%, 20.28%, and 15.01%, compared to industry averages of 38.60%, 21.31%, and 29. 63%, respectively.
POWR ratings reflect promising outlook
PFE has an overall rating of A, which equates to a strong buy in our own POWR Rankings system. POWR ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has an A rating for value, in line with its below-industry valuation multiples. It has a B rating for quality, consistent with its industry-leading profit margins.
In stock 161 Medical – Pharmaceutical industry, PFE is ranked #11.
Click on here for additional POWR ratings for PFE (Growth, Momentum, Stability and Sentiment).
See all major stocks in the medical and pharmaceutical industry here.
Conclusion
PFE’s revenue is expected to grow 42.4% year over year to reach $1.1 trillion in 2022. Its EPS is expected to grow 135.3% annually over the next five years. PFE has caught the eye of investors amid the pandemic. And given the stock’s attractive valuations and robust profitability, I think PFE could still be worth holding.
How does Pfizer Inc. (PFE) compare to its peers?
While PFE has an overall POWR rating of A, one might consider looking at its industry peers, Merck & Co., Inc. (M.K.R.), Novartis AG (NVS) and Johnson & Johnson (JNJ), which also have an overall rating of A (Strong Buy).
PFE shares fell $0.01 (-0.02%) in after-hours trading on Wednesday. Year-to-date, the PFE is down -25.26%, compared to a -21.52% rise in the benchmark S&P 500 over the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master’s degree in economics, she helps investors make informed investment decisions through her insightful commentary. After…
