PFE
PFE
Accumulate 2026-05-06
Model
DCF
Price at Report
$26.53
Base IV
$31.09
Bear IV
$10.57
Bull IV
$68.63
Entry Zone: 10-29 · Sell Above: 58
Bore Family Office
Valuation Report — Pfizer Inc. (PFE) • May 6, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 6.74% • Current Price: $26.53
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Pfizer is one of the world's largest pharmaceutical companies, with a 175-year history spanning from penicillin mass production to mRNA vaccines. The company operates across biopharmaceuticals, vaccines, and hospital products. Following the Covid-era revenue boom (peak $101B in 2022), PFE has returned to a $63B revenue base and is pivoting toward oncology via the $43B Seagen acquisition (closed Dec 2023), while managing patent cliffs on key drugs like Eliquis (2028 LOE) and Xeljanz. Management is executing a multi-year cost restructuring targeting $4.5B in savings by end of 2025. The dividend yield of ~6.5% reflects both the payout commitment and the compressed post-Covid valuation.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Oncology (incl. Seagen) | $9,800M | 16% | +25.0% | — | ADCs (Adcetris, Padcev, Tukysa); fastest-growing |
| Internal Medicine | $11,500M | 18% | -5.0% | — | Eliquis (anticoagulant), Xeljanz, Oxbryta |
| Hospital/Inflammation & Immunology | $8,200M | 13% | +4.0% | — | Prevnar, Abrysvo, Xeljanz (I&I) |
| Vaccines (Covid + Other) | $6,800M | 11% | -35.0% | — | Comirnaty/Paxlovid declining; Prevnar stable |
| Rare Disease | $4,200M | 7% | +12.0% | — | Vyndaqel/Vyndamax ( ATTR), Genzone |
| Other / Corporate | $12,200M | 19% | +2.0% | — | Legacy products, alliance revenue, unallocated |
| Blended Growth Rate | — | 100% | +1.2% | — | Weighted avg across segments |
📊 Business Lifecycle Stage
Stage 1
Startup
Startup
Stage 2
Hyper Growth
Hyper Growth
Stage 3
Self Funding
Self Funding
Stage 4
Operating Leverage
Operating Leverage
Stage 5
Capital Return
Capital Return
Stage 6
Decline
Decline
Stage 3 — Mature — Post-Covid Recovery: Revenue growing rapidly, approaching breakeven. FCF turning positive — DCF is appropriate with normalized near-breakeven years.
Why this drives model selection: FCF turning positive — DCF appropriate with normalized near-breakeven years.
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 2.3% | <8% weak |
| FCF Margin | 14.5% | ≥10% strong |
| Debt / EBITDA | 4.6x | >4x elevated |
⚠️ Elevated value trap risk — verify thesis before acting
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $81,288 | $101,175 | $59,553 | $63,627 | $62,579 |
| Rev YoY Growth | — | +24.5% | -41.1% | +6.8% | -1.6% |
| Gross Margin | 62.1% | 66.1% | 58.1% | 71.9% | 74.3% |
| EBITDA ($M) | $29,502 | $39,791 | $7,347 | $15,036 | $14,112 |
| EBITDA Margin | 36.3% | 39.3% | 12.3% | 23.6% | 22.6% |
| Operating Income ($M) | $24,311 | $34,727 | $1,057 | $8,023 | $7,520 |
| Operating Margin | 29.9% | 34.3% | 1.8% | 12.6% | 12.0% |
| Net Income ($M) | $21,979 | $31,372 | $2,119 | $8,031 | $7,771 |
| Net Margin | 27.0% | 31.0% | 3.6% | 12.6% | 12.4% |
| EPS (diluted) | $3.85 | $5.47 | $0.37 | $1.41 | $1.36 |
| Free Cash Flow ($M) | $29,869 | $26,031 | $4,793 | $9,835 | $9,075 |
| Annual DPS | $1.570 | $1.610 | $1.650 | $1.690 | $1.720 |
| Total Debt ($M) | $38,436 | $35,829 | $71,888 | $64,351 | $64,795 |
💹 Capital Return & Share Count Analysis
Net Share Change
-6.6% (2016→2025)
📉 Net reduction — buybacks exceed issuances
| Year | Diluted Shares (M) | YoY Change | Buyback Spend ($M) | Buyback Yield |
|---|---|---|---|---|
| 2016 | 6116.0M | — | $5,000 | 3.1% |
| 2017 | 6021.0M | -1.6% | $5,000 | 3.2% |
| 2018 | 5946.0M | -1.2% | $12,198 | 7.8% |
| 2019 | 5608.0M | -5.7% | $8,865 | 6.0% |
| 2020 | 5601.0M | -0.1% | — | — |
| 2021 | 5708.0M | +1.9% | — | — |
| 2022 | 5733.0M | +0.4% | $2,000 | 1.3% |
| 2023 | 5709.0M | -0.4% | — | — |
| 2024 | 5700.0M | -0.2% | — | — |
| 2025 | 5713.0M | +0.2% | — | — |
⚙️ WACC Build (DCF)
| Input | Value | Notes |
|---|---|---|
| Risk-Free Rate (Rf) | 4.25% | 10-yr US Treasury yield |
| Beta (β) | 0.650 | Market beta (Finnhub) |
| Equity Risk Premium (ERP) | 5.5% | Damodaran US ERP |
| Cost of Equity (Ke) | 7.83% | Ke = Rf + β × ERP |
| Pre-Tax Cost of Debt | 4.80% | Interest exp / gross debt |
| After-Tax Cost of Debt (Kd) | 4.22% | × (1 − 12%) |
| Weight Equity (We) | 69.8% | Mkt cap $0.0B |
| Weight Debt (Wd) | 30.2% | Gross debt $0.0B |
| WACC | 6.74% | DCF discount rate |
📈 DCF Scenarios
$11
🔴 Bear
$31
📊 Base
$69
🚀 Bull
$26.53
Current Price
$29
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | -2.0% | 1.0% | 2.0% | 8.24% | $11 | ▼60.2% |
| 📊 Base | 3.0% | 2.5% | 2.5% | 6.74% | $31 | ▲17.2% |
| 🚀 Bull | 7.0% | 4.0% | 3.0% | 5.74% | $69 | ▲158.7% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: -2.0% | Stage 2: 1.0% | Terminal: 2.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $8.20B | $7.58B | $7.58B |
| Year 2 ✦ | Stage 1 | $8.00B | $6.83B | $14.40B |
| Year 3 ✦ | Stage 1 | $7.80B | $6.15B | $20.55B |
| Year 4 ✦ | Stage 1 | $7.70B | $5.61B | $26.16B |
| Year 5 ✦ | Stage 1 | $7.60B | $5.12B | $31.28B |
| Year 6 | Stage 2 | $7.68B | $4.77B | $36.05B |
| Year 7 | Stage 2 | $7.75B | $4.45B | $40.51B |
| Year 8 | Stage 2 | $7.83B | $4.16B | $44.66B |
| Year 9 | Stage 2 | $7.91B | $3.88B | $48.54B |
| Year 10 | Stage 2 | $7.99B | $3.62B | $52.16B |
| Terminal | — | TV=$130.6B | PV(TV)=$59.2B (53% of EV) | EV=$111.3B |
| Intrinsic Value | — | — | EV $111.3B − Net Debt → Equity / Shares | $11 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (8.24%) to get its present value. After Year 10, FCF grows at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $130.6B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $59.2B). Enterprise Value = PV of FCFs ($52.2B) + PV of TV ($59.2B) = $111.3B. Subtracting net debt gives equity value of $60.1B, divided by shares outstanding = $11 per share.
Base Scenario
Stage 1: 3.0% | Stage 2: 2.5% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $9.40B | $8.81B | $8.81B |
| Year 2 ✦ | Stage 1 | $9.70B | $8.51B | $17.32B |
| Year 3 ✦ | Stage 1 | $10.10B | $8.31B | $25.63B |
| Year 4 ✦ | Stage 1 | $10.40B | $8.01B | $33.64B |
| Year 5 ✦ | Stage 1 | $10.70B | $7.72B | $41.36B |
| Year 6 | Stage 2 | $10.97B | $7.42B | $48.77B |
| Year 7 | Stage 2 | $11.24B | $7.12B | $55.90B |
| Year 8 | Stage 2 | $11.52B | $6.84B | $62.73B |
| Year 9 | Stage 2 | $11.81B | $6.57B | $69.30B |
| Year 10 | Stage 2 | $12.11B | $6.31B | $75.61B |
| Terminal | — | TV=$292.7B | PV(TV)=$152.4B (67% of EV) | EV=$228.0B |
| Intrinsic Value | — | — | EV $228.0B − Net Debt → Equity / Shares | $31 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (6.74%) to get its present value. After Year 10, FCF grows at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $292.7B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $152.4B). Enterprise Value = PV of FCFs ($75.6B) + PV of TV ($152.4B) = $228.0B. Subtracting net debt gives equity value of $176.8B, divided by shares outstanding = $31 per share.
✦ Year-by-year analyst consensus FCF estimates (Base scenario)
Bull Scenario
Stage 1: 7.0% | Stage 2: 4.0% | Terminal: 3.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $10.00B | $9.46B | $9.46B |
| Year 2 ✦ | Stage 1 | $10.70B | $9.57B | $19.03B |
| Year 3 ✦ | Stage 1 | $11.50B | $9.73B | $28.75B |
| Year 4 ✦ | Stage 1 | $12.30B | $9.84B | $38.59B |
| Year 5 ✦ | Stage 1 | $13.20B | $9.99B | $48.58B |
| Year 6 | Stage 2 | $13.73B | $9.82B | $58.40B |
| Year 7 | Stage 2 | $14.28B | $9.66B | $68.06B |
| Year 8 | Stage 2 | $14.85B | $9.50B | $77.56B |
| Year 9 | Stage 2 | $15.44B | $9.34B | $86.90B |
| Year 10 | Stage 2 | $16.06B | $9.19B | $96.10B |
| Terminal | — | TV=$603.7B | PV(TV)=$345.5B (78% of EV) | EV=$441.6B |
| Intrinsic Value | — | — | EV $441.6B − Net Debt → Equity / Shares | $69 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (5.74%) to get its present value. After Year 10, FCF grows at the terminal rate (3.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $603.7B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $345.5B). Enterprise Value = PV of FCFs ($96.1B) + PV of TV ($345.5B) = $441.6B. Subtracting net debt gives equity value of $390.4B, divided by shares outstanding = $69 per share.
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 4.7% | $47 | $55 | $67 | $86 | $120 |
| 5.2% | $40 | $45 | $53 | $64 | $82 |
| 5.7% | $34 | $38 | $43 | $51 | $61 |
| 6.2% | $29 | $32 | $36 | $41 | $48 |
| 6.7% | $25 | $28 | $31 | $35 | $40 |
| 7.2% | $22 | $24 | $27 | $29 | $33 |
| 7.7% | $20 | $21 | $23 | $25 | $28 |
| 8.2% | $18 | $19 | $20 | $22 | $24 |
| 8.7% | $16 | $17 | $18 | $19 | $21 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🌊 Elliott Wave Analysis
Elliott Wave structure analysis based on 500 days of price history. Current position and wave progress help evaluate entry timing.
| Structure | Type | Span | Waves | Score | Rules |
|---|---|---|---|---|---|
| Correction 1 | Correction | $22.75 → $24.49 | A→B→C | 5.3 | R1:100 R2:100 R3:100 |
| Impulse 2 (partial) | Impulse | $22.51 → $26.30 | 1→2→3→4 | 7.5 | R1:100 R2:100 R3:81 |
Current position: In Impulse 2, Wave 4 ~115% complete, target ~$28.98
🏦 Comparable Valuation
| Company | Ticker | P/E | EV/EBITDA | P/FCF | Div Yield | Notes |
|---|---|---|---|---|---|---|
| Pfizer | PFE | 19.3× | 10.6× | 17.0× | 6.5% | Post-Covid recovery; depressed multiples |
| Merck | MRK | 14.8× | 12.1× | 22.3× | 3.2% | Keytruda patent cliff 2028; similar LOE risk |
| Eli Lilly | LLY | 82.5× | 48.2× | 95.1× | 0.7% | Growth premium; obesity drug leader |
| Johnson & Johnson | JNJ | 15.9× | 12.8× | 18.5× | 3.0% | Diversified; medtech + pharma |
| Bristol-Myers Squibb | BMY | 8.5× | 6.9× | 9.2× | 5.2% | Deep value; patent cliff concerns |
| PFE 5-yr avg | — | 18.4× | 12.5× | 22.8× | 4.2% | Historical avg includes Covid boom |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $1.720 |
| Current Yield | 6.54% |
| Consecutive Growth Years | 10 |
| 1-yr DPS CAGR | +1.8% |
| 3-yr DPS CAGR | +0.6% |
| 5-yr DPS CAGR | +0.4% |
| 10-yr DPS CAGR | +3.5% |
| Payout Ratio (DPS/EPS) | 126.5% ⚠️ |
| FCF Payout Ratio | 108.4% ⚠️ |
| Sustainability Verdict | Watch |
GAAP payout ratio exceeds 100% due to depressed post-Covid EPS, but adjusted (non-GAAP) payout is ~63%. FCF payout of 108% is a concern — dividend consumes all of current FCF. However, PFE has $13.6B in cash/ST investments and strong FCF recovery trajectory (analysts expect ~$2.99 EPS in 2026, implying payout < 60%). 10-year consecutive growth streak signals management commitment. Sustainability depends on pipeline execution and Seagen ramp. Not at risk in the near term, but warrants close monitoring.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $5.47 | — | — | — | Actual |
| 2023 | $0.37 | — | — | — | Actual |
| 2024 | $1.41 | — | — | — | Actual |
| 2025 | $1.36 | — | — | — | Actual |
| 2026 | $2.74 | $2.99 | $3.33 | 29 | Estimate |
| 2027 | $2.43 | $2.85 | $3.18 | 28 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $101.2B | — | — | — | Actual |
| 2023 | $59.6B | — | — | — | Actual |
| 2024 | $63.6B | — | — | — | Actual |
| 2025 | $62.6B | — | — | — | Actual |
| 2026 | $58.6B | $61.9B | $65.7B | 29 | Estimate |
| 2027 | $54.8B | $59.5B | $65.8B | 28 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $29.29 | Range $25–$36
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Jin Zhang | CICC | Buy | $33 | +24.4% |
| Terence Flynn | Morgan Stanley | Hold | $28 | +5.5% |
| Geoff Meacham | Citigroup | Hold | $27 | +1.8% |
| Michael Yee | UBS | Hold | $27 | +1.8% |
| Trung Huynh | RBC Capital | Sell | $25 | -5.8% |
(d) Earnings Surprise History
| Quarter | EPS Act vs Est | EPS Beat/Miss | Rev Act vs Est | Rev Beat/Miss | Guidance |
|---|---|---|---|---|---|
| Q1 2026 | $0.75 vs $0.72 | +$0.03 ✅ | $14.5B vs $13.9B | +$0.6B ✅ | — |
| Q4 2025 | $0.66 vs $0.56 | +$0.10 ✅ | $17.6B vs $17.0B | +$0.6B ✅ | — |
| Q3 2025 | $0.87 vs $0.65 | +$0.22 ✅ | $16.7B vs $14.9B | +$1.8B ✅ | — |
| Q2 2025 | $0.78 vs $0.58 | +$0.20 ✅ | $14.7B vs $13.1B | +$1.6B ✅ | — |
(e) Confidence Band Commentary
PFE has beaten consensus EPS estimates in each of the last 4 quarters by an average of ~23%, suggesting analysts remain too conservative on near-term earnings power. Revenue beats have been more modest but consistent. The wide EPS surprise range (4% to 34%) reflects uncertainty around post-Covid normalization and Seagen ramp. The analyst price target range of $25–$36 is relatively narrow for a mega-cap, indicating reasonable consensus on the base trajectory. The key variable is whether PFE can sustain the FCF recovery trajectory as Comirnaty/Paxlovid revenue continues to decline and Seagen ramps. The consensus “Buy” rating with only $29.29 average PT (10% upside) suggests the street sees modest but reliable upside at current levels.
💡 Investment Thesis
Bull Case
- Seagen ramp delivers: The $43B acquisition gives PFE a top-5 oncology franchise with 4 approved ADCs (Adcetris, Padcev, Tukysa, Tivdak) and a deep pipeline. If Seagen hits $5B+ revenue by 2028, it replaces lost Eliquis revenue and drives FCF growth.
- Margin expansion: $4.5B cost restructuring (completed 2025) + Seagen integration synergies could push FCF margin from 14% to 18%+, significantly boosting intrinsic value.
- Pipeline optionality: 20+ mid-to-late-stage programs including danuglipron (oral GLP-1), elranatamab (multiple myeloma), and sotorasib (KRAS). Any 2-3 approvals would re-rate the stock from "value trap" to "recovering growth story."
- Valuation re-rating: At 19× P/E vs pharma peer avg of 22×, PFE trades at a discount. Pipeline success + FCF recovery could compress the discount.
Bear Case
- Patent cliff is real: Eliquis ($6.5B, 2028 LOE), Xeljanz ($2.3B), and Prevnar 20 competitive threats could erode $10B+ in revenue by 2030.
- Seagen overpaid: At $43B for ~$2.5B revenue, PFE paid 17× sales. If oncology pipeline disappoints, the acquisition becomes a value destroyer.
- Dividend trap risk: With FCF payout >100% on current numbers, the dividend is safe only if FCF recovers. If it doesn't, a dividend cut would crush the stock.
- Pipeline failure: Big pharma has ~8% Phase III success rate for novel mechanisms. If danuglipron fails (competitive GLP-1 market), growth narrative collapses.
Base Case Assumptions
- Seagen ramps to ~$3B revenue by 2028, partially offsetting Eliquis LOE
- FCF grows 3% annually as cost savings offset revenue headwinds
- 1-2 pipeline approvals add $1-2B in incremental revenue
- Dividend maintained but growth slows to ~1-2% (vs. historical 5-6%)
- Multiple re-rates modestly from 19× to 21× as earnings normalize
👔 Management Quality & Culture
CEO: Not identified · Tenure: Since 2019 (~7 yrs) · ★ Founder
⚠️ Key-Person Risk: HIGH
Founder-led company — strategy and culture deeply tied to a single individual. Succession planning is a material risk.
Net Insider Buys (12m)
+1,816,038 shares
Incentive Alignment
⚠️ Moderate
Compensation: Equity-based compensation present
CEO Background & Track Record
Albert Bourla - Wikipedia
In 2016, during his tenure, Innovative Health's revenue increased by 11%. Bourla became Pfizer's chief operating officer (COO) on January 1, 2018, overseeing the company's drug development, manufacturing, sales, and strategy.
In 2016, during his tenure, Innovative Health's revenue increased by 11%. Bourla became Pfizer's chief operating officer (COO) on January 1, 2018, overseeing the company's drug development, manufacturing, sales, and strategy.
Pfizer - Wikipedia
In 1980, Pfizer launched Feldene ... became Pfizer's first product to reach $1 billion in revenue. In 1965, John Powers, Jr. became chief executive officer (CEO) of the company, succeeding John McKeen. As the area surr
In 1980, Pfizer launched Feldene ... became Pfizer's first product to reach $1 billion in revenue. In 1965, John Powers, Jr. became chief executive officer (CEO) of the company, succeeding John McKeen. As the area surr
Executive | Pfizer
John J. Powers, Jr. President and Chief Executive Officer Chas. Pfizer & Co., Inc. 1966. John J. Powers, Jr.,is named president and CEO.
John J. Powers, Jr. President and Chief Executive Officer Chas. Pfizer & Co., Inc. 1966. John J. Powers, Jr.,is named president and CEO.
Capital Allocation & Strategy
Exhibit 99
Pfizer expects to sufficiently de-lever its balance sheet by the end of 2025 in order to return to a more balanced capital allocation strategy. This includes the flexibility to deploy capital towards potential value-creatin
Pfizer expects to sufficiently de-lever its balance sheet by the end of 2025 in order to return to a more balanced capital allocation strategy. This includes the flexibility to deploy capital towards potential value-creatin
What is Growth Strategy and Future Prospects of Pfizer Compa
Pfizer reported roughly high‑$50 ... like Prevnar 20 and Ibrance underpin a strategy of targeted expansion, tech‑enabled R&D and disciplined capital allocation....
Pfizer reported roughly high‑$50 ... like Prevnar 20 and Ibrance underpin a strategy of targeted expansion, tech‑enabled R&D and disciplined capital allocation....
Employee Ratings
Overall Rating
3.7/5 ★★★★☆
Culture Signal
Positive
✅ Strengths
- recommend
Employee Review Excerpts
Pfizer Reviews (8,669): Pros & Cons of Working At Pfizer | G
How satisfied are employees working at Pfizer?70% of Pfizer employees would recommend working there to a friend based on Glassdoor reviews. Employees also rated Pfizer 3.7 out of 5 for work life balance, 3.6 for culture and values
How satisfied are employees working at Pfizer?70% of Pfizer employees would recommend working there to a friend based on Glassdoor reviews. Employees also rated Pfizer 3.7 out of 5 for work life balance, 3.6 for culture and values
Pfizer "people" Reviews | Glassdoor
Dec 2, 2025 · Senior associate ... · Current employee, more than 10 years · Recommend · CEO approval · Business Outlook · Pros · Great people culture and flexibility ·...
Dec 2, 2025 · Senior associate ... · Current employee, more than 10 years · Recommend · CEO approval · Business Outlook · Pros · Great people culture and flexibility ·...
Pfizer "culture" Reviews | Glassdoor
CEO approval · Business Outlook · Pros · Good teamwork, bosses, culture, people · Cons · Commission structure can be further enhanced · Show more · Helpful · Share · 5.0 · Dec 16, 2025 · Qc analyst · Former employee, more t
CEO approval · Business Outlook · Pros · Good teamwork, bosses, culture, people · Cons · Commission structure can be further enhanced · Show more · Helpful · Share · 5.0 · Dec 16, 2025 · Qc analyst · Former employee, more t
Sources: Finnhub insider data · Brave Search (Glassdoor, Indeed, Comparably, news) · Earnings surprise data from analyst forecasts · Qualitative signals are directional only.
⚖️ DCF Verdict: Accumulate — Pfizer Inc. (PFE)
Current price: $26.53 | Analyst Avg PT: $29.29
$11
🔴 Bear
$31
📊 Base
$69
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$29 | Begin position |
| Tier 2 — Add | ≤$21 | Add on weakness |
| Tier 3 — Full | ≤$10 | Full allocation |
| Sell Alert | ≥$58 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
Accumulate. Pfizer is a post-Covid recovery story trading at deep value multiples with a 6.5% dividend yield as compensation for waiting. The base case intrinsic value suggests modest upside from current levels, with the dividend providing a total return floor. The key question is whether Seagen and the pipeline can offset the Eliquis patent cliff (2028). If they can, PFE re-rates to $30+. If they can't, the dividend is at risk and the stock drifts lower.
Entry zone: $24–27 (current price in zone). The 6.5% yield provides a meaningful income cushion. Wait for confirmation of FCF recovery (watch Q2 2026 earnings for sustained $0.68+ EPS). Add aggressively below $24 if the market overreacts to bad news.
Sell signal: Below $20 (implies FCF collapse or dividend cut risk) or if Seagen revenue stalls below $2B in 2026.
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| FCF Base | Used FY2025 FCF of $9,075M (EDGAR XBRL). TTM FCF is $9,483M but includes one-off working capital benefits. FY2024/2025 average of $9,455M is close to our base. |
| WACC | Adjusted beta from 0.31 (Finnhub 5-yr) to 0.65. The 0.31 beta is a Covid-era artifact — PFE was less volatile than the market during the pandemic because vaccine revenue provided a floor. A forward-looking beta of 0.65 is consistent with mega-cap pharma peers (MRK 0.64, JNJ 0.55) and better reflects the patent-cliff and execution risk PFE faces. WACC = 6.74%. Pre-tax Kd 4.80% (BBB+ rated debt). Tax rate 12% (FY2025 effective — low due to R&D credits and foreign income). |
| Sanity Check | Base IV will likely be above analyst consensus PT of $29.29 given low WACC. This is expected — the low beta mechanically pushes IV up. PFE's risk profile genuinely is lower than average. If IV diverges >20% from analyst PT, will need to revisit WACC assumptions. |
| Terminal Growth | Base gT=2.5% — appropriate for a mature pharma with diversified revenue. PFE has 175 years of history and will continue generating cash flows from its portfolio. Not a growth company but not a terminal decline either. |
| Covid Distortion | FY2021-2022 revenue ($81-101B) and FCF ($26-30B) were anomalous. We treat these as outliers and anchor to the post-Covid normalized base ($63B revenue, $9B FCF). |
| Debt Load | Net debt of $51.2B is elevated (3.6× FCF) due to Seagen acquisition financing. PFE has $13.6B in cash and strong FCF generation to delever. Debt/EBITDA of 4.6× is manageable for investment-grade pharma. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.