Standpoint Research Downgrades Pfizer (PFE) to Sell
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Price: $26.27 --0%
Rating Summary:
13 Buy, 20 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 6 | Down: 5 | New: 2
Rating Summary:
13 Buy, 20 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 6 | Down: 5 | New: 2
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Standpoint Research downgraded Pfizer (NYSE: PFE) from Hold to Sell with a price target of $24.00.
Analyst Ronnie Moas comments:
"As for Pfizer – a name that ranks # 128 out of 190 in the Healthcare sector according to my 155-variable computer model – The market cap is now $185 bln. Short interest has exploded from 85 mln shares to more than 200 mln in the last month. Earnings Purity is just 73% and that means the earnings are being inflated as “one-time charges” are routinely not counted as expenses. This type of accounting in effect serves to artificially depress the P/E/G ratio and make PFE look more attractive than it actually is. Revenues have gone from $67 bln to $57 bln since 2010 mainly due to Lipitor going off patent. EPS is lower now than it was five years ago and the P/E is > 12X with estimates for EPS in decline. In my opinion there are better names to be in within the Healthcare sector (even if those names don’t pay you a 3% dividend yield).
As for PFE getting involved in the bidding war for ONXX. First of all, ONXX may have $1 bln in revenue in 2015; less than 2% of where PFE is now. So I doubt a $10 bln acquisition will help PFE move the needle (if they manage to wrestle ONXX away from AMGN). In my opinion, you may have a winner’s curse scenario playing out here, as you see oftentimes in an auction. Whoever places the highest bid and wins the prize ends up overpaying. PFE already has $40 bln in debt (and $35 bln in cash) on its balance sheet."
For an analyst ratings summary and ratings history on Pfizer click here. For more ratings news on Pfizer click here.
Shares of Pfizer closed at $27.78 yesterday.
Analyst Ronnie Moas comments:
"As for Pfizer – a name that ranks # 128 out of 190 in the Healthcare sector according to my 155-variable computer model – The market cap is now $185 bln. Short interest has exploded from 85 mln shares to more than 200 mln in the last month. Earnings Purity is just 73% and that means the earnings are being inflated as “one-time charges” are routinely not counted as expenses. This type of accounting in effect serves to artificially depress the P/E/G ratio and make PFE look more attractive than it actually is. Revenues have gone from $67 bln to $57 bln since 2010 mainly due to Lipitor going off patent. EPS is lower now than it was five years ago and the P/E is > 12X with estimates for EPS in decline. In my opinion there are better names to be in within the Healthcare sector (even if those names don’t pay you a 3% dividend yield).
As for PFE getting involved in the bidding war for ONXX. First of all, ONXX may have $1 bln in revenue in 2015; less than 2% of where PFE is now. So I doubt a $10 bln acquisition will help PFE move the needle (if they manage to wrestle ONXX away from AMGN). In my opinion, you may have a winner’s curse scenario playing out here, as you see oftentimes in an auction. Whoever places the highest bid and wins the prize ends up overpaying. PFE already has $40 bln in debt (and $35 bln in cash) on its balance sheet."
For an analyst ratings summary and ratings history on Pfizer click here. For more ratings news on Pfizer click here.
Shares of Pfizer closed at $27.78 yesterday.
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