Key Takeaways From Pfizer’s Earnings
Pfizer’s Q1 2016 earnings re-affirmed our bullish stance on the stock. We have upgraded our price estimate to $37 per share. Here are the key takeaways from the earnings that investors should keep in mind.
Takeaway 1: Pfizer’s Growth Is Bouncing Back
- Q1 2016 revenues grew 26% year over year to $13.0 billion, excluding currency effects
- Excluding Hospira acquisition and five additional sales days, the growth rate was 7%
- This is a substantial improvement considering Pfizer’s revenues have declined ~ 28% in last 5 years
- Key drivers: cancer drug Ibrance, musculoskeletal drug Xeljanz, Prevnar vaccine & blood thinner Eliquis
- We have upgraded 2016 revenue growth forecast from 5.5% to 7.8%
- Should You Pick Pfizer Stock At $30 After A 30% Fall In A Year?
- Should You Pick Pfizer Stock At $30?
- Down 25% In A Year Will Pfizer Stock Rebound To Its Pre-Inflation Shock Level?
- Will Pfizer Stock See Higher Levels Post Q1 Earnings?
- Is Pfizer Stock Undervalued At $40?
- This Logistics Company Appears To Be A Better Pick Over Pfizer Stock
Takeaway 2: Bet On Hospira, Pipeline & Current Growth Drivers Could Lend Long Term Support
Hospira acquisition and its impact:
- Positions Pfizer strongly in sterile injectables & biosimilars
- Three biosimilars in the market: Inflectra, Nivestim, and Retacrit
- Inflectra approved by the FDA, could pave way for others
- Biosimilar market could reach $35 billion by 2020; government support likely as cost savings of $44 billion possible in 10 years
Pipeline
- Nine new compounds in Phase 3 clinical trials with combined peak sales potential of ~ $10.5 billion
Current Growth Drivers
- Drugs that drove Q1 2016 growth: Ibrance, Xeljanz, Prevnar & Eliquis
- Their combined sales can jump from $8.8 billion in 2015 to $16 billion in 2020
Takeaway 3: Inversion Deals Are Likely Off In The Near Term
- Pfizer and Allergan recently called off the proposed merger, following government’s move to make tax inversion strategy less rewarding
- Pfizer has made it clear that another such deal is unlikely in the near future
- However, given Pfizer’s history of financial engineering, a split that separates company’s legacy and growth products is not entirely unlikely
Have more questions about Pfizer? See the links below.
- By What Percentage Did Pfizer’s Revenue & EBITDA Decline In The Last 5 Years?
- Will Pfizer Answer These Two Questions In Its First Quarter Earnings?
- By What Percentage Can Pfizer’s Revenue & EBITDA Grow In The Next 3 Years?
- How Has Pfizer’s Revenue Composition Changed Over The Last 5 Years?
- How Much Additional Synergies Does Pfizer Require To Justify Premium Paid For Allergan?
- Looking At M&A History, What Metrics Suggest That Pfizer Has Been Conservative While Engineering Allergan Deal?
- How Much Revenues Can Pfizer’s Phase 3 Pipeline Add By 2020?
- What’s Pfizer’s Revenue And Earnings Breakdown?
Notes:
See More at Trefis | View Interactive Institutional Research (Powered by Trefis)