Long time readers will know I have been negative on Pfizer for a long time. I first wrote about PFE on Motley Fool so long ago that the article is actually difficult to find.
That being said, since I have zero interest in owning the name I don't really watch it that often. I see on the CNBC big that the stock is up 2%, in sympathy with Merck, to $22. Holy cow.
Even so the stock is still 62% institutionally owned. A lot of that stock is in index funds and can't be sold but there is plenty of actively managed money that could sell if it wanted.
The reason for my pessimism has to do with revenue growth. With revenue around $52 billion I don't see how it can create enough blockbuster drugs to offer sustained double digit growth (I am aware that the pipeline has around 25 drugs in it and that maybe ten of them could be huge).
At some point the name has to bottom (maybe here, who knows?) but a lot of smart people thought the bottom was $26. I would be cautious of any analysis that is the same old same old.
Wikinvest Wire
1 comments:
Good call thus far, but it seems to me that at the current P/E and yield, few are expecting double digit growth. Additionlay with the current balance sheet and cash generation, large share buy backs and greater dividens are possible, if management is willing to accept the low growth reality.
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