After listening to Albert Bourla, the CEO of Pfizer (PFE) during the fourth-quarter 2021 earnings call, as well as the Hospital Products leadership team at the SVB Leerink Global Healthcare Conference on February 16, I am very confident that this company will be at the vanguard of healthcare and pharmaceutical research that leads to personalized medicine.
I believe this will continue to create large amounts of wealth for investors along the way.
Before I get into the future, let’s look at the company’s performance during the past year. One way to quantify the positive results Pfizer has had is by looking at the sheer number of people who have used one or more of their products during the past year.
More than 1.4 billion people have used at least one of Pfizer’s products during 2021. That equates to more than one person out of every six people on Earth who have used one of Pfizer’s products during the last year.
Another way to gauge the positive results (one we are all familiar with) is the company’s financial results. Those results over the past year speak for themselves.
The company’s financial performance was up 92% year-over-year when considering the two COVID-19 treatments that the company has developed and marketed. The company is up 6% year-over-year with the COVID-19 treatments removed.
What I am most excited about is Pfizer’s roadmap to maximize its mRNA technology platform. A bit of history for anyone who has been hiding in a cave during the COVID-19 pandemic: Pfizer has (along with BioNTech) developed a novel type of vaccine to fight the virus that causes COVID-19.
What is really great for the company and investors is the same technology will also allow Pfizer to create other virus vaccines (Flu and Shingles), to use base editing to treat rare diseases (similar to what Ionis and Biogen are doing with Spinraza), as well as then to take new research and technology to use base editing to develop long-sought-after treatments for internal medicine.
I also believe that this type of technology is setting the stage for personalized medicine, where gene-editing technology allows a doctor and pharmaceutical company to develop a unique medicine to treat each patient individually.
Pfizer is helping us get much closer to the day when those types of treatment options are available and will make investors very wealthy along the way.
Recent Results and Dividend
Pfizer’s stock has been trading between $33.44 (the 52-week low set on February 25th, 2021) and $61.71 (the 52-week high set on December 12, 2021).
PFE has brought in revenues of $81.3 billion over the last 12 months and net income of 21.98 billion over the same period.
The company reported fourth-quarter earnings of $1.08 per share, beating analyst estimates of $0.87 per share. It also reported $4.42 in earnings per share for 2021, beating analyst estimates of $3.70.
Pfizer currently pays a dividend of $0.40 per quarter. This is a dividend yield of 3.28%. PFE’s dividend has been slowly growing by $0.01 per year with the exception of the one-time dividend payout of $1.97 in November of 2020.
The company has an outstanding balance sheet. It has a current ratio of 1.35, so it has enough current assets on hand to pay its bills for the next 1.35 years.
When I calculated the stock’s intrinsic value by modeling discounted cash flows, I pegged it at $62.21. I believe the company’s track record of outstanding research and development, as well as execution, will allow the company’s stock to reach its intrinsic value.
Wall Street’s Take
Pfizer stock holds a Moderate Buy rating on TipRanks, based on eight Buys and nine Holds assigned over the past three months.
TipRanks.com shows that 94% of the 76 bloggers that have blogged about PFE in the last three months are bullish, compared to a 69% bullish industry average.
Conclusion
Based on the intrinsic value of this stock, and the company’s ability to conduct research and development as well as execute, I am very bullish about this stock.
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