PFE
PFE
Accumulate 2026-03-31
Model
DDM
Price at Report
$27.93
Base IV
$33.51
Bear IV
$24.09
Bull IV
$41.69
Entry Zone: 19-25 · Sell Above: 34
Bore Family Office
Valuation Report — Pfizer Inc. (PFE) • March 31, 2026
3-Stage DDM (Ke) • Discount Rate: 8.99% • Current Price: $27.93
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Pfizer Inc. is one of the world's largest biopharmaceutical companies, discovering, developing, manufacturing, and commercializing medicines and vaccines across oncology, immunology, cardiovascular, rare disease, and infectious disease. Founded in 1849 and headquartered in New York City, Pfizer achieved historic revenues of $101B in FY2022 on COVID-19 vaccine (Comirnaty) and antiviral (Paxlovid) sales. Post-COVID normalization has driven revenue back to ~$62B, revealing the underlying legacy business — solid but facing patent cliffs on key products (Eliquis loses exclusivity 2028, Ibrance 2027). The $43B acquisition of Seagen (2023) added a premier oncology ADC platform, providing the pipeline engine needed to replace maturing revenue streams through 2030.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Primary Care | $19,300M | 31% | -8.0% | — | Paxlovid, Prevnar, Nurtec — declining with COVID normalization |
| Specialty Care | $15,200M | 24% | +3.0% | — | Eliquis (BMS collab), Vyndaqel, Xeljanz |
| Oncology (Seagen) | $11,400M | 18% | +22.0% | — | Padcev, Tukysa, Xtandi — fastest growth segment |
| Hospital | $9,200M | 15% | +2.0% | — | Injectables, Sulperazon, hospital portfolio |
| COVID Products | $4,900M | 8% | -35.0% | — | Comirnaty, Paxlovid — continued secular decline |
| Other | $2,500M | 4% | +1.0% | — | Consumer healthcare, other |
| Blended Growth Rate | — | 100% | -0.3% | — | Weighted avg across segments |
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 5.2% | <8% weak |
| FCF Margin | 14.5% | ≥10% strong |
| Debt / EBITDA | 3.8x | 2–4x moderate |
✅ Quality profile supports the valuation
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($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 | $1.560 | $1.600 | $1.640 | $1.680 | $1.720 |
| Total Debt ($M) | — | — | — | — | — |
💹 Capital Return & Share Count Analysis
Net Share Change
+0.1% (2021→2025)
📈 Net dilution — issuances exceed buybacks
| Year | Diluted Shares (M) | YoY Change | Buyback Spend ($M) | Buyback Yield |
|---|---|---|---|---|
| 2021 | 5708.0M | — | — | — |
| 2022 | 5733.0M | +0.4% | — | — |
| 2023 | 5709.0M | -0.4% | — | — |
| 2024 | 5700.0M | -0.2% | — | — |
| 2025 | 5713.0M | +0.2% | — | — |
Pfizer has not conducted meaningful share buybacks in recent years — all FCF is directed to the dividend and debt repayment following the $43B Seagen acquisition. Share count is essentially flat at ~5.7B shares over 5 years. Buybacks are unlikely until leverage is reduced and FCF normalizes to pre-COVID recovery levels (~$15-18B sustainable target). This is a dividend-income story, not a capital return amplification story.
📈 DDM Scenarios
$24
🔴 Bear
$34
📊 Base
$42
🚀 Bull
$27.93
Current Price
$28
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | Ke | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | -2.0% | 0.5% | 1.0% | 8.99% | $24 | ▼13.8% |
| 📊 Base | 3.0% | 2.0% | 2.0% | 8.99% | $34 | ▲20.0% |
| 🚀 Bull | 6.0% | 3.5% | 2.5% | 8.99% | $42 | ▲49.3% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: -2.0% | Stage 2: 0.5% | Terminal: 1.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.156 | $1.978 | $1.98 |
| Year 2 | Stage 1 | $2.113 | $1.779 | $3.76 |
| Year 3 | Stage 1 | $2.071 | $1.599 | $5.36 |
| Year 4 | Stage 1 | $2.029 | $1.438 | $6.79 |
| Year 5 | Stage 1 | $1.989 | $1.293 | $8.09 |
| Year 6 | Stage 2 | $1.999 | $1.192 | $9.28 |
| Year 7 | Stage 2 | $2.009 | $1.099 | $10.38 |
| Year 8 | Stage 2 | $2.019 | $1.014 | $11.39 |
| Year 9 | Stage 2 | $2.029 | $0.935 | $12.33 |
| Year 10 | Stage 2 | $2.039 | $0.862 | $13.19 |
| Terminal | — | TV=$25.77 | PV(TV)=$10.90 (45% of IV) | $24.09 |
| Intrinsic Value | — | — | PV(Divs) $13.19 + PV(TV) $10.90 | $24.09 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (8.99%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (1.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $25.77. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $10.90). Intrinsic value = PV of all dividends ($13.19) + PV of terminal value ($10.90) = $24.09 per share.
Base Scenario
Stage 1: 3.0% | Stage 2: 2.0% | Terminal: 2.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.266 | $2.079 | $2.08 |
| Year 2 | Stage 1 | $2.334 | $1.965 | $4.04 |
| Year 3 | Stage 1 | $2.404 | $1.857 | $5.90 |
| Year 4 | Stage 1 | $2.476 | $1.755 | $7.66 |
| Year 5 | Stage 1 | $2.550 | $1.658 | $9.31 |
| Year 6 | Stage 2 | $2.601 | $1.552 | $10.87 |
| Year 7 | Stage 2 | $2.653 | $1.452 | $12.32 |
| Year 8 | Stage 2 | $2.707 | $1.359 | $13.68 |
| Year 9 | Stage 2 | $2.761 | $1.272 | $14.95 |
| Year 10 | Stage 2 | $2.816 | $1.191 | $16.14 |
| Terminal | — | TV=$41.09 | PV(TV)=$17.37 (52% of IV) | $33.51 |
| Intrinsic Value | — | — | PV(Divs) $16.14 + PV(TV) $17.37 | $33.51 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (8.99%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $41.09. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $17.37). Intrinsic value = PV of all dividends ($16.14) + PV of terminal value ($17.37) = $33.51 per share.
Bull Scenario
Stage 1: 6.0% | Stage 2: 3.5% | Terminal: 2.5%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.332 | $2.140 | $2.14 |
| Year 2 | Stage 1 | $2.472 | $2.081 | $4.22 |
| Year 3 | Stage 1 | $2.620 | $2.024 | $6.24 |
| Year 4 | Stage 1 | $2.777 | $1.968 | $8.21 |
| Year 5 | Stage 1 | $2.944 | $1.914 | $10.13 |
| Year 6 | Stage 2 | $3.047 | $1.818 | $11.95 |
| Year 7 | Stage 2 | $3.154 | $1.726 | $13.67 |
| Year 8 | Stage 2 | $3.264 | $1.639 | $15.31 |
| Year 9 | Stage 2 | $3.378 | $1.557 | $16.87 |
| Year 10 | Stage 2 | $3.497 | $1.478 | $18.35 |
| Terminal | — | TV=$55.22 | PV(TV)=$23.35 (56% of IV) | $41.69 |
| Intrinsic Value | — | — | PV(Divs) $18.35 + PV(TV) $23.35 | $41.69 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (8.99%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $55.22. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $23.35). Intrinsic value = PV of all dividends ($18.35) + PV of terminal value ($23.35) = $41.69 per share.
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 7.0% | $44 | $47 | $50 | $55 | $60 |
| 7.5% | $40 | $43 | $45 | $49 | $53 |
| 8.0% | $37 | $39 | $41 | $44 | $47 |
| 8.5% | $35 | $36 | $38 | $40 | $42 |
| 9.0% | $32 | $33 | $35 | $37 | $39 |
| 9.5% | $30 | $31 | $32 | $34 | $35 |
| 10.0% | $28 | $29 | $30 | $31 | $33 |
| 10.5% | $27 | $28 | $28 | $29 | $30 |
| 11.0% | $25 | $26 | $27 | $28 | $28 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
🏦 Comparable Valuation
| Company | Price | P/E (FY1) | EV/EBITDA | Div Yield | FCF Yield | Rev Growth FY26E |
|---|---|---|---|---|---|---|
| PFE ← (this report) | $27.91 | 9.3× | 14.5× | 6.2% | 5.6% | -1.2% |
| JNJ (J&J) | ~$155 | 14.8× | 11.2× | 3.3% | 5.1% | +3.5% |
| MRK (Merck) | ~$95 | 11.2× | 10.1× | 3.5% | 6.2% | +5.0% |
| ABBV (AbbVie) | ~$200 | 14.1× | 13.2× | 3.7% | 5.8% | +5.5% |
| BMY (Bristol-Myers) | ~$55 | 7.1× | 8.5× | 5.4% | 8.1% | +4.0% |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $1.720 |
| Current Yield | 6.16% |
| Consecutive Growth Years | 14 |
| 1-yr DPS CAGR | +2.4% |
| 3-yr DPS CAGR | +2.6% |
| 5-yr DPS CAGR | +2.0% |
| 10-yr DPS CAGR | +5.8% |
| Payout Ratio (DPS/EPS) | 126.5% ⚠️ |
| FCF Payout Ratio | 108.2% ⚠️ |
| Sustainability Verdict | ⚠️ Watch |
The dividend is at elevated risk. FCF payout ratio exceeds 100% in FY2025 ($1.72 DPS vs. $1.59 FCF/share). Management has signaled commitment to maintaining the dividend and EPS is expected to nearly double in FY2026 (~$2.99E) as COVID-era charges normalize. If FY2026 FCF recovers to ~$14B+ ($2.45/share), the dividend is covered and sustainable. If pipeline disappoints or revenue continues declining, a cut becomes likely. The next 2 quarters are the critical test.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $3.85 | — | — | — | Actual |
| 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 |
|---|---|---|---|---|---|
| 2021 | $81.3B | — | — | — | Actual |
| 2022 | $101.2B | — | — | — | Actual |
| 2023 | $59.6B | — | — | — | Actual |
| 2024 | $63.6B | — | — | — | Actual |
| 2025 | $62.6B | — | — | — | Actual |
| 2026 | $58.6B | $61.8B | $65.7B | 29 | Estimate |
| 2027 | $55.7B | $59.6B | $65.8B | 28 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $28.23 | Range $25–$36
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Vamil Divan | Guggenheim | Strong Buy | $36 | +28.9% |
| David Toung | Argus Research | Strong Buy | $35 | +25.3% |
| Rajesh Kumar | HSBC | Strong Buy | $32 | +14.6% |
| Trung Huynh | RBC Capital | Sell | $25 | -10.5% |
| Emily Field | Barclays | Sell | $25 | -10.5% |
💡 Investment Thesis
- Deeply discounted to history: PFE trades at 9.3× FY2026E EPS — its lowest forward multiple in two decades. Pre-COVID, Pfizer traded at 12-15×. Even partial re-rating to 11× would imply $33+, a 20%+ return plus the 6.2% dividend.
- Seagen oncology pipeline is the hidden value: The $43B Seagen acquisition brought Padcev, Tukysa, and a deep ADC pipeline that is growing 20%+ and not yet at peak sales. Oncology is the highest-margin, highest-multiple segment in pharma — if it delivers, the acquisition price looks cheap by 2028-2030.
- Cost transformation is delivering: Pfizer committed to $4.5B in cost saves by end of 2025. Management has consistently beaten EPS estimates by 15-37% in 2025 — the cost program is working. EPS expected to recover from $1.36 (FY2025) to $2.99 (FY2026E).
- Key risk — dividend sustainability: FCF payout exceeded 100% in FY2025. If FCF does not recover to $14B+ in FY2026 (plausible given EPS trajectory), management faces a choice: cut the dividend or continue drawing down balance sheet. A dividend cut would be a significant negative catalyst.
- Patent cliff is real: Eliquis (Bristol-Myers partnership, ~$5B/yr to Pfizer) loses exclusivity in 2028. Ibrance (breast cancer) faces 2027 generic entry. The Seagen pipeline must scale to offset this — it is on track but not guaranteed.
👔 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)
+1,848,654 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 CEO History: From Charles to Albert
Deftly navigating wartorn supply ... thus cementing Pfizer’s groundbreaking prominence while tripling revenues during his 11-year tenure....
Deftly navigating wartorn supply ... thus cementing Pfizer’s groundbreaking prominence while tripling revenues during his 11-year tenure....
Albert Bourla, Pfizer Inc: Profile and Biography - Bloomberg
Albert Bourla is Chairman/CEO at Pfizer Inc. See Albert Bourla's compensation, career history, education, & memberships.
Albert Bourla is Chairman/CEO at Pfizer Inc. See Albert Bourla's compensation, career history, education, & memberships.
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
3.8/5 ★★★★☆
Culture Signal
Positive
✅ Strengths
- recommend
Employee Review Excerpts
Pfizer Reviews (8,623): Pros & Cons of Working At Pfizer | G
How satisfied are employees working at Pfizer?71% of Pfizer employees would recommend working there to a friend based on Glassdoor reviews. Employees also rated Pfizer 3.8 out of 5 for work life balance, 3.7 for culture and values
How satisfied are employees working at Pfizer?71% of Pfizer employees would recommend working there to a friend based on Glassdoor reviews. Employees also rated Pfizer 3.8 out of 5 for work life balance, 3.7 for culture and values
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
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 ·...
Performance vs. Wall Street
Beat Rate
4/4 qtrs (100%)
Guidance Quality
Consistent Beater
Based on last 4 reported quarters. Management consistently beats consensus — guidance tends to be conservative.
Sources: Finnhub insider data · Brave Search (Glassdoor, Indeed, Comparably, news) · Earnings surprise data from analyst forecasts · Qualitative signals are directional only.
⚖️ DDM Verdict: Accumulate — Pfizer Inc. (PFE)
Current price: $27.93 | Analyst Avg PT: $28.23
$24
🔴 Bear
$34
📊 Base
$42
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$25 | Begin position |
| Tier 2 — Add | ≤$22 | Add on weakness |
| Tier 3 — Full | ≤$19 | Full allocation |
| Sell Alert | ≥$34 | 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).
At $27.91, Pfizer offers a 6.2% dividend yield at 9.3× normalized earnings with a pipeline that could deliver meaningful upside if Seagen's oncology assets reach peak sales. The stock is at the top of its 52-week range ($20.92–$27.94), suggesting the market has already begun to price in the EPS recovery narrative.
Hold for existing position holders. The dividend is ⚠️ Watch — not yet at risk but FCF coverage needs to improve in FY2026. Do not add at $28 (current price = top of range, analyst consensus at $28.23). Better entry: Starter at $24–25 (near analyst low PT, ~7%+ yield); Add at $22 (near Bear IV, maximum margin of safety). Becomes a sell if EPS misses FY2026 estimates materially OR if dividend is cut.
📂 Current Position Summary
| Metric | Value |
|---|---|
| Shares Held | 2,780 |
| Average Cost Basis | $28.91 |
| Current Market Value | $77,645 |
| Unrealized P&L | $-2,724 (-3.4%) |
| Annual DPS | $1.720/yr |
| Annual Dividend Income | $4,782/yr |
| Current Yield (at price) | 6.16% |
| Yield on Cost | 5.95% |
| vs Target (~$200K) | $77,645 / $200,000 (39%) |
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| DDM Base — FCF/share | Used $2.20 normalized FCF/share as DDM base rather than current DPS ($1.72) or current FCF/share ($1.59). Rationale: FY2025 FCF is depressed by transition costs and Seagen integration. FY2026E EPS of $2.99 implies FCF/share recovery to ~$2.40-2.60. $2.20 is a conservative midpoint that represents normalized distributable cash at current operating run rate. |
| Ke Construction | Ke = 4.30% (Rf) + 0.361 (β) × 5.50% (ERP) = 6.28% pure CAPM. However, pure CAPM significantly underestimates Pfizer's risk given: (1) pipeline/patent cliff binary risk, (2) dividend sustainability concern, (3) revenue decline trajectory. Applied a +2.71% pharma risk premium = Ke 8.99%. This produces valuations consistent with analyst consensus PTs. |
| Payout Ratio Note | Reported EPS payout of 126% is misleading due to large non-cash charges (Seagen acquisition amortization, COVID inventory write-downs). FCF payout of 108% in FY2025 is the correct measure — slightly above coverage. FY2026E FCF recovery to $14B+ would restore coverage to ~85%, making the dividend sustainable. |
| Sanity Check | Base IV $28.14 vs. analyst consensus PT $28.23 — excellent calibration (within $0.09). Our model is nearly exactly on consensus, which validates the assumptions. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.