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Pfizer Inc. Message Board

  • fizrwinnr11 fizrwinnr11 Apr 20, 2013 11:05 PM Flag

    For the first time ever, my one-year sentiment rating for Pfizer is now Sell

    Going back as far as early 2004, the stock has as little value as I have ever seen. The company is only a 4% to 5% EPS grower and even that is strictly due to stock buybacks - not internal growth. Pfizer has almost no pricing leeway overseas and is at the mercy of whatever the governments facing austerity want to pay. If the Spanish government for example says it is going to slash payments by 5% this year, what can PFE do about it?
    On the domestic front, it's pretty apparent to me that "negoatiated" Medicare prices are in the cards a little ways down the road. I expect that the GOP will be forced to cave on the issue; perhaps in return for lowered taxes on "the rich," etc.
    Once upon a time, PFE routinely sold at a multiple of 15 or more and was worth every penny. During the early McKinnell years, here is what PFE's earnings looked like:
    $1.02 in 2000
    $1.31 in 2001
    $1.53 in 2002
    $1.75 in 2003
    $2.12 in 2004
    Now THAT is a thing of beuty - with EPS more than doubling over just four years. So even though dividends were a palty 1% to 2% during those years, the torrid growth made the stock very attractive.
    But this isn't 2001-2004 and now we see the following "growth."
    $2.19 in 2012 (actual)
    $2.28 in 2013 (consensus)
    $2.38 in 2014 (consensus).
    $2.49 in 2015 (consensus)
    $2.65 in 2016 (consensus)
    Wowza! I can hardly contain myself looking at those numbers. And given European austerity and cost-cutting and the likelihood of "negotiated" Medicare a few years out, there isn't much that Pfizer and the drugmakers can do to improve their fortunes. Stock buybacks at these lofty levels will positively affect results much less and whereas PFE acquired WYE at distress prices at the bottom of the crash, acquisitions these days require an arm and a leg.
    I used to think that PFE could show at least mid-single-digit internal growth, I no longer see ANY internal growth at all because the company simply has no pricing discretion; other governments facing austerity now call the shot

    Sentiment: Sell

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