Morningstar

Pfizer Looks Undervalued

We think the market is underestimating the pharma giant’s long-term earnings potential.

 and
Securities In This Article
Novartis AG ADR
(NVS)
Eli Lilly and Co
(LLY)
Pfizer Inc
(PFE)

We are holding firm to our $38 fair value estimate following

In the quarter, growth from vaccine Prevnar 13 and recently launched drugs helped to offset generic competition, leading to 5% year-over-year operational growth (excluding the Hospira acquisition). While the organic growth rate will likely slow in 2016 as Prevnar sales annualize the U.S. bolus of adult patients recently approved for treatment, several other recently launched drugs are poised for rapid growth. In particular, breast cancer drug Ibrance is well positioned to generate peak sales of more than $6 billion and while competition is emerging from

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About the Authors

Damien Conover, CFA

Director of Equity Research, North America
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Damien Conover, CFA, is director of equity research, North America, for Morningstar*.

Before joining Morningstar in 2007, Conover was an equity research analyst covering the healthcare sector for Raymond James, Bank of Montreal, and Tucker Anthony.

Conover holds bachelor’s and master’s degrees in finance from the University of Wisconsin and was a member of its Applied Security Analysis Program. He also holds the Chartered Financial Analyst® designation.

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

Michael Waterhouse

Sector Strategist
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Michael Waterhouse is a healthcare strategist for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers specialty pharmaceutical and life science and diagnostic companies.

Before joining Morningstar in 2010, Waterhouse was a research biologist for the Centers for Disease Control and Prevention. He was also a volunteer in the Peace Corps.

Waterhouse holds a bachelor’s degree in biology from the University of Georgia. He also holds a master’s degree in business administration from the University of Minnesota, where he participated in the Carlson Funds Enterprise, a student managed investment fund.

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