Is it a good idea to buy Pfizer (NYSE:PFE) right now at US$36.62, which is 49.7% below its intrinsic value?

PUBLISHED Jul 6, 2023, 1:44:56 PM        SHARE

img
imgYumi Cheng

It is anticipated that Pfizer will no longer make as many sales from the coronavirus-related products now that the pandemic appears to be gone. But why are those congress still investing in PFE stocks this year, including Kathy Manning, Carol Devine Miller, and Lois Frankel? Are there new developments at Pfizer that worth our attention?

What Is Pfizer’s Worth?

According to Discounted Cash Flows (Growth Exit 5Y) model, the intrinsic value of Pfizer Inc (PFE) is $73.68. As one of the largest global pharmaceutical companies, Pfizer's COVID-19 vaccine and booster doses, which it co-developed with partner BioNTech SE (BNTX) have garnered a lot of media attention and sales over the past two years.

The poorest year-to-date performance on this list is the stock itself, which is down 27.5% as of June 30. However, Pfizer is currently 18 months into a timeframe that should see the launch of 19 new products, this is a high point for the large drug business. Pfizer estimates that 15 of these potential products will generate $20 billion in revenue by 2030, more than compensating the patent cliff.

That said, for long-term investment, Pfizer is an undervalued stock for value investors to consider since it is $10 less than CFRA’s “buy” rating price target.

For investors, what does this mean?

Sales of coronavirus-related products will undoubtedly fall this year. Additionally, the loss of exclusivity may have an adverse effect on earnings over the next years. All of this might hurt Pfizer stock prices. But that is only a temporary issue. Although Pfizer's coronavirus portfolio is unlikely to provide pandemic-level profits in the future, it will probably still make a sizable profit with their new pills released. And the new potential products on the horizon are set to more than compensate for patent losses. Pfizer is preparing for expansion as a result of all of this. Today appears to be the ideal time to join, with shares trading at just 12 times estimated forward earnings.

PFE, Buy

Pfizer Inc.
Return: -23.29%

PFE, Buy

Return: -23.29%


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