What To Expect From Pfizer’s Q4?

by Trefis Team
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Pfizer (NYSE:PFE) is slated to release its Q4 and full-year 2019 results on January 28, 2020. For full year 2019, Trefis estimates that the company will report:

  • Revenues of $52.2 billion, reflecting 2.8% y-o-y decline, primarily driven by the company’s consumer healthcare segment spin off. Our revenue forecast is higher than the consensus estimate of $51.7 billion.
  • EPS figure will likely decline to $2.96 on an adjusted basis, primarily due to lower revenues, and a modest growth in expenses, partly offset by an expected drop in outstanding shares, as compared to the previous year. Our EPS figure forecast is in line with the consensus estimate of $2.96.

We believe that an in-line earnings for full year 2019 will likely result in a slight positive movement in Pfizer’s stock price, post earnings announcement. In fact, our forecast indicates that Pfizer’s valuation is $46 per share, which is roughly 15% above the current price of ~ $40. Look at our interactive dashboard analysis on Pfizer’s Pre-Earnings for full year 2019 for more details.

(1) Revenues Expected To Be Higher Than The Consensus Estimates

(2) Adjusted EPS Expected To Slightly Decline From $3.00 In 2018 To $2.96 In 2019

  • Pfizer’s 2019 adjusted earnings per share (EPS) is expected to be $2.96 per Trefis analysis, in line with the consensus estimate of $2.96 per share.

Total Revenues                  $52.2 Bil
– Total Expenses                $35.4 Bil
————————————————-
Net Income                        $16.8 Bil
÷ Shares Outstanding      5.6 Bil
————————————————-
EPS                                     $2.96
Consensus                         $2.96
Surprise                             $0.00

  • Adjusted EPS Expected To Slightly Decline From $3.00 In 2018 To $2.96 In 2019
  • A decline in revenues, and a modest growth in expenses will drive EPS lower.
  • As we forecast Pfizer’s revenues to decline 2.8%, and expenses to decline at 0.9%, this will result in a 130 bps decline in the company’s adjusted net income margin figure from 33.5% in 2018 to 32.2% in 2019, as detailed in the dashboard.
  • See Pfizer Expenses – How Does Pfizer Spend Its Money? We provide an interactive, in-depth view of the company’s expenses (non-adjusted), and earnings margins.
  • Key for 2020: We believe that revenue will continue to decline in low single-digits, while expenses could also see a modest decline, resulting in the net income margin figure to increase to 32.6%. We currently forecast Pfizer’s 2020 EPS to be $2.98 on an adjusted basis.

(3) Stock Price Estimate ~ 15% Higher Than Market Price

  • Trefis’ forecast for Pfizer’s full year 2019 earnings is in line with the market expectations, but P/E multiple is slightly higher than the consensus, working out to a fair value of $46 for Pfizer’s stock, which is roughly 15% higher than the current market price of around $40.
  • A trailing P/E multiple of 15.4x looks appropriate for Pfizer’s stock, which is slightly higher than the current implied P/E multiple of 13.5x.
  • We use our full cash flow model for Pfizer to arrive at a P/E multiple of 15.4x for a price estimate of $46.
  • Note: P/E Multiples are based on Share Price at the end of the year, and reported (or expected) Adjusted Earnings for the full year.

See all Trefis Price Estimates and Download Trefis Data here

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