From Value Line's post-earnings Supplemental Report
All told, our investment thesis remains largely unchanged from our April 13th report and we are maintaining our 2012 earnings estimate of $1.25 a share.
Pfizer is a strong company with solid fundamentals and sizable shares in most markets. Although patent expirations are a concern, we believe the drugmaker should be able to effectively weather the storm given its impressive track record.
With several pipeline products showing promise in late-stage studies, we believe it is only a matter of time before these drugs are developed into meaningful top-line contributors. For investors seeking a strong total-return play with relative stability, neutrally-ranked Pfizer stock has an above-average dividendyield and a top rank for safety. The company's financial strength (A+) is also outstanding.
Value line seldom has better than a Neutral rating on Pfizer largely because it insists on using GAAP accounting (notice the $1.25 forecast that it is using).
Pfizer is the ONLY big, domestic pharma where Value Line uses GAAP - for MRK which last year only reported a few dimes per share in GAAP earnings, Value Line shows the non-GAAP figure of $3.77. Moreover, Value Line shows GAAP results and estimates for Pfizer only for the years 2008 and thereafter; all stats through 2007 are non-GAAP.
On occasions I've been sorely tempted to cancel my subscription with them but I just can't afford to not be without their 15-year history of revenues, stock price ranges and in most cases non-GAAP earnings.
However, the commentary and PE multiples are most unfair when Value Line uses GAAP for Pfizer and non-GAAP for everyone else.