UBS Reiterates Buy on Pfizer (PFE) Following a Meeting with Management
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UBS reiterated a Buy rating and $38.00 price target on Pfizer (NYSE: PFE) following a meeting with management. The main topics included the recent decision not to break up, M&A/BD strategy, expenses/operating leverage and CNS remaining an attractive therapeutic area for research.
A UBS analyst commented, "Without breaking up and as one company, mgt pointed to modest top line growth until it gets through two additional LOEs (Viagra and Lyrica). As for the two separate businesses, the CEO believes that investors underappreciate the growth potential for each of them. In the Innovative side, he pointed to the IO assets as growth drivers. And in Essential Health, he pointed to growth from emerging markets, biosimilars, and injectables as well as the opportunity to drive costs down further. Mgt believes that the biggest opportunity to unlock value is in this larger business that has the potential to grow. Since going forward Pfizer will manage the two businesses separately, mgt indicated that there is always the option to separate down the road if valuations or the tax situation change, but it also indicated that it wouldn’t be reviewing this issue on a quarterly basis and wouldn’t be providing any new date for a future decision."
Shares of Pfizer closed at $33.32 yesterday.
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