Why Pfizer (PFE) Fell Today

NEW YORK (TheStreet) -- Pfizer  (PFE) fell 1.4% to $29.66 Monday after the maker of Viagra announced that one of its experimental lung cancer drugs failed in two late-stage studies.

Pfizer tested the drug called dacomitinib on patients who had received prior treatment for advanced non-small cell lung cancer, which is the most common form of the cancer. The drug fell short of goals in the two studies, but Pfizer will continue to test dacomitinib.

The stock amassed a volume of 32,499,448, well above its average of 24,277,000. It hit a high of $30.25 and closed at its low of $29.66 for the day. Pfizer has a one-year high of $32.50 and a one-year low of $26.79.

TheStreet Ratings team rates PFIZER INC as a "buy" with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate PFIZER INC (PFE) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The current debt-to-equity ratio, 0.47, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, PFE has a quick ratio of 2.21, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has increased to $5,908.00 million or 18.08% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.51%.
  • PFIZER INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PFIZER INC increased its bottom line by earning $1.20 versus $1.06 in the prior year. This year, the market expects an improvement in earnings ($2.18 versus $1.20).
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • You can view the full analysis from the report here: PFE Ratings Report

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