Pfizer's (PFE - Get Report) near-term outlook is positive as evidenced by its recent earnings beat, but longer-term the company's picture becomes murky, says UBS, leading the firm to lower the stock's price target in a note Thursday.
The firm lowered its price target to $37 a share from $43 per share while maintaining its neutral rating on the stock.
Pfizer shares fell 0.44% to $37.09 in trading Thursday.
UBS is bullish on Pfizer's Vyndaqel launch, the lone FDA-approved treatment for heart problems caused by transthyretin-mediated amyloidosis. Analyst Navin Jacob, however, believes that Wall Street has a good handle on the drug's benefits and already has priced it in.
"PFE RemainCo has one of the best growth profiles in pharma with a 2020-2025 revenue and EPS compound annual growth rate of 6% and 13%, respectively. But our concern is on the more than $20B small molecule patent cliff (~43% of RemainCo Revs in '25)," Jacob wrote. "We estimate pipeline will offset ~50% of this cliff. Thus, we are not sure RemainCo multiple can rerate as management hopes until multiple pipeline assets readout positively or more deals are completed."
Pfizer reported stronger-than-expected earnings in late October while also raising its full-year profit guidance.
Pfizer said adjusted earnings for the three months ended in September came in at 75 cents a share, down 3.8% from the same period last year and firmly ahead of the Wall Street consensus forecast of 62 cents. Revenue slipped 5% to $12.68 billion but again topped analysts' forecasts of a $12.46 billion tally.