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Pfizer Inc. Message Board

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  • suckeesuckeesuckee suckeesuckeesuckee Dec 20, 2007 8:02 PM Flag

    pfe should

    I consider the current analysts' consensus for 2012 of $2.01 EPS to be slightly on the optimistic side. That you think it's too low only makes me more positive that it's too high, since you are always preposterously, hilariously wrong, by laughable, ludicrous margins.

    Any estimate five years out is sure to be way off, but you're in a different galaxy. IMO, given the very little we can actually know now, any EPS in the analysts' range of roughly $1.80 to $2.20 is defensible, but given PFE's truly, astonishingly, shockingly poor pipeline & acquisition performance to date, I'd presently opt for the lower half of that range.

    For all we know, PFE won't make any substantial acquisitions, either in large lumps or in the aggregate of small buys. Its pathetic Phase III pipeline might be a complete bust; indeed based on its pitiful record, that would be the way to bet.

    Nor does one have to posit "massive government" intervention to expect lower prices for products remaining on patent. All it would take magically to make profits go "Poof!" would be for the Medicare negotiation bill so narrowly defeated this year to pass in 2008 or 2009, as is more likely than not, considering almost certain Democrat gains in the Senate.

    I could go on, but a final salient point is that Lipitor isn't the only major PFE drug going off patent in the next five years. Around 40% or more of this year's revenue will come from such soon to be goners.

    It's absurd to pick a single EPS value out of the likely range, but IMO $2.01 is as good a guess as any at this far a remove. Lipitor is so astronomically profitable that PFE's margins are sure to plummet after it goes off-patent. As noted, in fact, I think PFE's EPS might well be under $2 in 2012.

    Here's how I derive that figure, with my guesses rounded to two significant numbers:

    Revenue: $44 billion
    Profit Margin: 27%
    Shares: 5.9 billion.
    EPS: $2.01

    I see sales from existing products remaining on patent rising to $37 billion (optimistic), with $2.5 billion each from acquisitions & pipeline drugs & another $2 billion from residual revenue for off-patent drugs. Acquisition & pipeline income could be higher, but more likely less. At this distance, all I or anyone else can do is take a stab down the middle.

    This is far more realistic than your usual pie in the sky, wishful thinking, which has always proved so risibly far off the mark in the past.

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