NEW YORK (TheStreet) -- Jefferies raised its 2016 earnings estimates for Pfizer (PFE) - Get Report to $2.45 per share from $2.43 per share this morning, following the Brooklyn-based pharmaceutical company's announcement that it would purchase Medivation (MDVN) for $14 billion.
Earlier this week, Pfizer announced it would acquire the San Francisco-based cancer drugmaker in a deal that values Medivation at $81.50 per share.
"We believe that MDVN will help to strengthen oncology at PFE, and provide an earnings bridge through the US Viagra and Lyrica LOEs," Jefferies said in their analyst note. "The decision on the separation of the Essential Health business remains a key catalyst for 2016, though we increasingly believe that this will not occur."
The firm also increased its 2017 earnings outlook to $2.71 per share, up from its prior estimates of $2.65 per share.
Pfizer's acquisition of Medivation will add the prostate drug Xtandi to its portfolio, as well as its BRCA mutation breast cancer drug Talazoparib, Jefferies added.
Additionally, Jefferies said the proposed separation of Pfizer's Essential Health business could drive up the stock's valuation, but recent discussions indicate the split is unlikely to happen.
Shares of Pfizer slid in late afternoon trading on Thursday.
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Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate PFIZER INC as a Buy with a ratings score of B+. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
You can view the full analysis from the report here: