It might not pay off immediately, but it could, eventually.
Trading at a bit under $25 apiece, Pfizer‘s (PFE 0.36%) shares appear tentatively cheap. However, the pharmaceutical giant reached these levels because it has faced significant headwinds, resulting in a poor stock market performance over the past three years.
Yet, what is the outlook for the struggling giant from here? Is Pfizer worth investing in at current levels?
Image source: Getty Images.
Slowly engineering a comeback
Pfizer’s revenue and earnings have been inconsistent over the past few years. To make matters worse, the drugmaker will encounter important patent cliffs within a few years, including that of Eliquis, an anticoagulant and one of its best-selling drugs. Even so, the company has been gradually earning new approvals, some of which should have a meaningful impact on its financial results as label expansions are secured.
Further, Pfizer has doubled down on acquisitions, which has helped it improve its pipeline. The company now has a comprehensive list of candidates across multiple therapeutic areas, with a particular focus on cancer. It also boasts a promising candidate for weight loss. Pfizer should launch several new products that will bolster its lineup through the end of the decade.
Today’s Change
(-0.36%) $-0.09
Current Price
$24.90
Key Data Points
Market Cap
$142B
Day’s Range
$24.88 – $25.02
52wk Range
$20.91 – $27.69
Volume
29M
Avg Vol
66M
Gross Margin
69.12%
Dividend Yield
6.91%
Even more reasons to buy
Purchasing shares of top companies when they are down is a great way to earn excellent returns over the long run. Pfizer is a top pick to consider, given that it has been making the right moves to overcome slow (or non-existent) revenue growth and patent cliffs. And there are even more reasons to consider the stock. Here are three.
First, Pfizer penned a deal with the Trump administration that will allow it to avoid tariffs for three years. Second, the company is a solid dividend payer. It has increased its payouts by 51.3% over the past decade, and boasts a juicy forward yield of 6.9%.
Lastly, Pfizer is trading at 8.5 times forward earnings, much lower than the 18.4 healthcare sector average. All these make for compelling reasons to buy the stock.
