All depends on the international event, market, sector & company specific risk assumptions you make. Will Bapi be approved & sell well? How much money will be in the market over the next decade, as Boomers retire & switch more to bonds every year? Will Obamacare be repealed? What other acquisitions will PFE need to make? To name but a few of dozens of risk factors.
There are too many unknowns to derive a meaningful single fair value number, IMO, but somewhere between $8 & $14 is liable to be in the ball park.
Boomers are expected to live too long and they just don't have the wealth to make ends meet by putting their money in 4% bonds.
Bapi just doesn't matter that much - even if approved it's only a $5B drug of which just half goes to Pfizer. An extra $2.5B in revenues around 2018 would be nice but it's hardly make or break - not for a $67B company.
The incredible positive that Pfizer will have within just a few years is the paucity of patent expirations. Very very little will be lost due to that factor.
With that being the case, how does the company NOT grow earnings per share apace when there will be annual drug price hikes, population growth, overseas expansion, boomers turning 65, Obamacare enrollees, new inlicensing agreements, small acquisitions and stock buybacks - with very little of those gains being lost to stock buybacks.
I expect the stock to be in the $28 to $30 range by the time the January 2013 options expire.
BMY at $25 is currently selling for over 13 times their consensus earnings expectation of just $1.90 per share. Pfizer is expected to have about 20% HIGHER earnings per share that year. Why should their stock price also be 20% higher? What advantages do BMY have that Pfizer doesn't have?