How Will Pfizer Perform In 2018?

by Trefis Team
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We have created an interactive dashboard on Pfizer’s (NYSE:PFE) expected performance in 2018. You can adjust the revenue and margin drivers to see the impact on the company’s performance. Overall, we forecast revenue growth of around 2% and EPS of just under $3 for 2018.

Oncology Segment Will Lead Revenue Growth In 2018

 

 

We expect Pfizer’s Oncology segment revenues to grow by 19% in 2018, primarily led by a ramp up in Ibrance sales. Ibrance, which is a used for the treatment of breast cancer, has seen solid growth of late, and we expect this to continue in 2018 with estimated sales of $3.8 billion. Many of Pfizer’s other segments will likely see declines in the coming years, as many of its drugs have either lost patent exclusivity or are about to lose it over the next 2-3 years. Having said that, we believe the Legacy Pharma, Consumer, Biosimilars & Other segment will likely see low-mid single digit growth in 2018, given the ramp up in Eliquis sales. The segment should also benefit from Pfizer’s biosimilars, especially Inflectra, which targets blockbuster drug Remicade’s market in the U.S.  

6% Forecast Growth In 2018 Net Income

Pfizer’s Non-GAAP Net Income Margin has been around 30% on average over the past few years, and we expect that to be slightly higher in 2018 amid benefits from tax reform. Given our revenue growth forecast, we forecast around 6% growth in net income in 2018 to about $17.1 billion.

$41 Price Estimate For Pfizer

Our Net Income forecast of $17.1 billion translates into EPS of about $2.90 in 2018. We estimate a price-earnings multiple of around 14 for Pfizer, which is below many pharma industry multiples, reflecting the risk of biosimilars impacting the company’s future growth. This translates into a price estimate of $41 for Pfizer’s stock, which is around 10% above the current market price.

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