Morningstar Rating

Stock Research and Analysis

by Damien Conover, CFA

Bulls Say

Pfizer's pipeline is developing into one of the best in the industry. Pfizer's Xeljanz is a potential game-changer in rheumatoid arthritis. In addition, Pfizer's Eliquis should develop into a major blockbuster in atrial fibrillation.
The stock boasts a dividend yield of close to 4% and we expect the dividend payout ratio will increase during the next few years.
The internal restructuring of innovative divisions and mature business lines could lead to more clarity on the value of Pfizer's research and development power. 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 next generation of drugs.
Pfizer is facing generic competition for several of its products with more than $1 billion in annual sales. Failure to receive FDA approval for its drugs in late-stage development could exacerbate its revenue decline.
Austerity measures in Europe are likely to put pricing pressure on an important market for Pfizer. Read more 

Management

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

Profile

Pfizer is the world's largest pharmaceutical firm, with annual sales over $50 billion. Following the acquisition of Wyeth, prescription drugs now account for close to 90%   Read more 

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