NEW YORK (TheStreet) -- Shares of Pfizer (PFE) - Get Report were down in pre-market trading on Monday as the pharmaceutical company said it will no longer pursue its plan to split into two publicly traded companies.
Pfizer had decided to spin off into two companies, Pfizer Innovative Health and Pfizer Essential Health. After evaluating each unit's performance, ability to compete as a stand-alone company and if any additional value could be unlocked efficiently, the New York City-based company said it chose to keep its current structure.
"When we first explored the trapped value question several years ago, market valuations of other companies suggested that our two businesses could potentially be worth more as separate companies than they are together a single company," said Pfizer CFO Frank D'Amelio in a statement. "However, over time any potential gap between Pfizer's market valuation and an implied Sum of the Parts (SOTP) market valuation has closed."
The company began exploring the possibility of a split as its patent-protected medicines saw sales growth, while its generics portfolio experienced sales declines, according to Reuters.
Pfizer noted that the decision to remain a single company will not impact its 2016 forecast.
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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:
TheStreet Ratings team rates Pfizer as a Buy with a ratings score of B. This is driven by several positive factors, which it believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks it covers. 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, expanding profit margins and increase in stock price during the past year. The team feels 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: PFE