Why Pfizer (PFE) Stock Is Lower Today

NEW YORK (TheStreet) -- Shares of Pfizer Inc. (PFE) are down -0.53% to $30.30 in early morning trade as the drugmaker is expected to report significantly lower second quarter revenue tomorrow.

That's the result of the company's "vulnerability to cheaper generics and its weak roster of experimental medicine...reviving interest in its pursuit of AstraZeneca (AZN) or other deals to fortify its pipeline," Reuters reports.

While many industry watchers expect Pfizer to re-engage with AstraZeneca in coming months, some say the drugmaker should consider targets more focused on biotechnology, Reuters said.

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

"We rate PFIZER INC (PFE) a BUY. This is driven by several positive factors, 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 largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations, expanding profit margins and notable return on equity. 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, 0.48, 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 1.75, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has increased to $2,935.00 million or 30.96% when compared to the same quarter last year. In addition, PFIZER INC has also vastly surpassed the industry average cash flow growth rate of -54.80%.
  • 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 $1.65 versus $1.20 in the prior year. This year, the market expects an improvement in earnings ($2.24 versus $1.65).
  • The gross profit margin for PFIZER INC is currently very high, coming in at 86.04%. Regardless of PFE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PFE's net profit margin of 20.61% compares favorably to the industry average.
  • You can view the full analysis from the report here: PFE Ratings Report

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