Pfizer Inc. (PFE): A Bull Case Theory

Core Thesis - Pfizer Inc. is viewed positively due to its strong financials, robust cash flow, and potential for capital appreciation despite recent revenue normalization post-COVID [2][5]. Financial Performance - Pfizer's revenue has decreased from approximately $100 billion in 2022 to $58 billion in 2023, but is projected to rebound to around $64 billion by 2025 due to new drug launches [2]. - The company maintains strong profitability with operating margins near 28% and net margins exceeding 35% [2]. - Pfizer generates over $18 billion in annual free cash flow, which supports dividends, share buybacks, and R&D without reliance on capital markets [3]. - The stock offers a dividend yield near 6.7%, with a historical record of not cutting dividends since the 1940s [3]. Valuation Metrics - Pfizer's trailing and forward P/E ratios are 12.78 and 7.74 respectively, indicating a valuation below the industry average [1][2]. - If the dividend yield reverts to its historical average of 4%, Pfizer shares could imply a price range of $42–$45, suggesting significant upside potential [3]. Technical Analysis - Technical indicators show a medium-term bullish trend with a higher-low/higher-high structure since May, positive RSI and MACD momentum [4]. - Key retracement support is identified around $25.10–$25.20, providing a disciplined entry point for investors [4]. - Upside targets are set at $27.50 and $29, with a stop-loss below $24 to mitigate downside risk [4]. Strategic Outlook - The company has a strong pipeline of new therapies and has engaged in strategic M&A with Seagen, which supports its long-term growth prospects [5]. - Despite a 17% depreciation in stock value since the last coverage, the overall investment thesis remains intact due to attractive cash flow and valuation metrics [5].