This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Pfizer's Got Plenty of Upside

If I had to pick one drug stock to own for the next 10 years, it'd be Pfizer (PFE). I mean, let's face it. This company has it all -- a tremendous pharmaceutical business and a bevy of blockbuster consumer products from Benadryl to Listerine to Zantac. The combination has the potential to provide investors with double-digit earnings growth for at least the next three to five years.

What makes me so optimistic?

Take a look at how some of its key pharmaceuticals are performing. In the third quarter, Lipitor (for cholesterol) sales jumped 37%, while Neurontin (for epilepsy) and Viagra (you know what that's for) reported year-over-year increases of 32% and 13%, respectively. Put simply, the company is, unlike many of its big name competitors, firing on all cylinders.

And although some may point out that its consumer business continues to struggle, Pfizer's ability to milk efficiencies out of its merger with Warner Lambert will more than pick up the slack. In fact, sources tell me that management's efforts to improve the company's product mix and reduce headcount at the acquired company will lead to consistent margin improvement through next year.

  • American Express
    Glenn Curtis
    and
    Odette Galli
  • Talbots
    Glenn Curtis

    and Tim Arango
  • Hasbro
    Arne Alsin

    and Gary B. Smith
  • Office Depot
    Arne Alsin
    and
    Chris Edmonds
  • Oracle
    Glenn Curtis
    and
    Jim Seymour

But even more interesting to me is management's comments in conjunction with its past two earnings releases. On conference calls with the investment community, Pfizer has stated repeatedly that it's comfortable with full-year 2001 earnings estimates of $1.27 to $1.30 per share, and 2002 estimates of $1.56 or better. Put simply, management's enthusiasm and proven ability to perform suggests that these estimates are pretty darn conservative, and that future upside earnings surprises are likely in the cards.

So what's Pfizer worth?

Based upon the company's stated goal of growing earnings by 20% or more in the coming year, and bringing hot new products such as Exubra (an inhaled insulin) and Neurontin (for neuropathic pain) to market within the next two years -- I think we are looking at a $50 stock at a minimum. Who won today's Face-Off? Glenn Curtis Lissa Morgenthaler

In keeping with TSC's editorial policy, Glenn Curtis doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Curtis welcomes your feedback and invites you to send it to Glenn Curtis.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs