It was a rock star during the coronavirus pandemic, but Pfizer (PFE 2.20%) hasn't been the most exciting company in 2024. Its stock has become something of a value play, at least according to one analyst who released a fresh research note based on meetings with company management. He feels the stock has upside potential that's comfortably in the double-digit percentages. Here's why.
An enthusiastic bull
BMO Capital's Evan David Seigerman recently reiterated his outperform (i.e., buy) recommendation on Pfizer. He also maintained his $36-per-share price target on the well-known healthcare stock, which anticipates a gain of nearly 20% over the next 12 months. The meetings that led to the recommendation came in the form of non-deal roadshows hosted by BMO that included private conferences between company managers and institutional investors.
Of these, Seigerman wrote, "We came away from the meetings with a sense of motivated self-awareness," on Pfizer's part. He feels the company has a sensible strategy to regain its footing somewhat after the years of the COVID-19 pandemic when Comirnaty (co-developed with German peer BioNTech) was a vaccine used to fight the disease.
Solid potential
Seigerman's takeaway from those meetings is that Pfizer will emphasize the development of pipeline drugs in segments such as oncology and weight loss, and elevate the importance of profit and loss management, among other measures.
Might such efforts reap gains in the very near future? Collectively, the analysts tracking the stock seem to think so. On average, they're modeling a nearly 5% growth in revenue for the full-year 2024, to over $61 billion. Profitability should see a more dramatic improvement, with an estimated 43% year-over-year leap to $2.63 per share.
I feel that the sluggishness in Pfizer's stock price derives from investors expecting another Comirnaty, and being impatient that the company hasn't lately developed a new world-beating product. Yet its pipeline looks busy, and there are more than a few drugs that could make quite the impact if and when commercialized. I'd agree with Seigerman that this stock is undervalued, and more than worthy of a buy.
