Morningstar Rating

Stock Research and Analysis

by Damien Conover, CFA

Bulls Say

Pfizer's pipeline productivity is improving with several successful recent launches. In particular, Pfizer's Xeljanz is a potential game-changer in rheumatoid arthritis. In addition, Pfizer's Eliquis should develop into a blockbuster in atrial fibrillation.
The stock supports a dividend yield of over 3% and we expect the dividend payout ratio will increase during the next few years.
The review of breaking up Pfizer's innovative core and established drug group increases the visibility of the company and creates optionality to potentially create value through cutting the firm in two. Read more 

Bears Say

Pfizer's aggressive cost-cutting in research and development could hurt the long-term prospects of the firm as less capital is available to develop the company's pipeline.
While through the worst of its patent cliff, Pfizer still faces major patent losses with Celebrex generic competition likely to weigh on growth in 2015.
Several of Pfizer's late-stage pipeline drugs are entering crowded markets, which may limit market share gains. Read more 

Management

We rate Pfizer's stewardship as standard. While the company has made many poor capital allocation decisions over the past decade, the current management appears to be focusing on better uses of cash, including share buybacks and dividends. However,   Read more 

Profile

Pfizer is one of the world's largest pharmaceutical firms, with annual sales close to $50 billion. Prescription drugs and vaccines account for close to 90% of sales. Top   Read more 

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