3 Stocks Reiterated As A Buy: PFE, REGN, PEP

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

NEW YORK (TheStreet) -- TheStreet Ratings team reiterated 3 stocks with a buy rating on Monday based on 32 different data factors including general market action, fundamental analysis and technical indicators. The in-depth analysis of these ratings decisions goes as follows:

Pfizer Inc:

Pfizer (NYSE: PFE) has been reiterated by TheStreet Ratings as a buy with a ratings score of B+. According to TheStreet Ratings team: Among the primary strengths of the company is its expanding profit margins over time. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

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Highlights from the ratings report include:
  • PFIZER INC's earnings per share declined by 10.0% in the most recent quarter compared to the same quarter a year ago. 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).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.4%. Since the same quarter one year prior, revenues slightly dropped by 2.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The gross profit margin for PFIZER INC is currently very high, coming in at 73.96%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, PFE's net profit margin of 22.92% compares favorably to the industry average.
  • In its most recent trading session, PFE has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Pharmaceuticals industry. The net income has significantly decreased by 79.3% when compared to the same quarter one year ago, falling from $14,099.00 million to $2,912.00 million.

Pfizer Inc. discovers, develops, manufactures, and sells healthcare products worldwide. It offers medicines and vaccines, and various consumer healthcare products. Pfizer has a market cap of $183.1 billion and is part of the health care sector and drugs industry. Shares are down 5.8% year-to-date as of the close of trading on Friday.

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Regeneron Pharmaceuticals Inc:

Regeneron Pharmaceuticals (Nasdaq: REGN) has been reiterated by TheStreet Ratings as a buy with a ratings score of B. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

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Highlights from the ratings report include:
  • REGN's revenue growth has slightly outpaced the industry average of 36.5%. Since the same quarter one year prior, revenues rose by 42.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • REGN's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 5.56, which clearly demonstrates the ability to cover short-term cash needs.
  • REGENERON PHARMACEUTICALS's earnings per share declined by 35.5% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, REGENERON PHARMACEUTICALS reported lower earnings of $3.80 versus $6.61 in the prior year. This year, the market expects an improvement in earnings ($10.03 versus $3.80).
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • Net operating cash flow has decreased to $53.53 million or 37.93% when compared to the same quarter last year. Despite a decrease in cash flow of 37.93%, REGENERON PHARMACEUTICALS is in line with the industry average cash flow growth rate of -47.73%.

Regeneron Pharmaceuticals, Inc., a biopharmaceutical company, discovers, invents, develops, manufactures, and commercializes medicines for the treatment of serious medical conditions in the United States and internationally. Regeneron has a market cap of $31.3 billion and is part of the health care sector and drugs industry. Shares are up 17.8% year-to-date as of the close of trading on Friday.

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PepsiCo Inc:

PepsiCo (NYSE: PEP) has been reiterated by TheStreet Ratings as a buy with a ratings score of A+. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, growth in earnings per share, expanding profit margins and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

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Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 3.4%. Since the same quarter one year prior, revenues slightly increased by 0.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has slightly increased to $2,491.00 million or 7.69% when compared to the same quarter last year. In addition, PEPSICO INC has also modestly surpassed the industry average cash flow growth rate of 2.99%.
  • PEPSICO INC reported flat earnings per share in the most recent quarter. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, PEPSICO INC increased its bottom line by earning $4.32 versus $3.92 in the prior year. This year, the market expects an improvement in earnings ($4.58 versus $4.32).
  • The gross profit margin for PEPSICO INC is rather high; currently it is at 57.56%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 11.70% trails the industry average.

PepsiCo, Inc. operates as a food and beverage company worldwide. Its Frito-Lay North America segment offers Lay's and Ruffles potato chips, Doritos and Tostitos tortilla chips, Cheetos cheese flavored snacks, dips, Fritos corn chips, and Santitas tortilla chips. PepsiCo has a market cap of $132.7 billion and is part of the consumer goods sector and food & beverage industry. Shares are up 6.2% year-to-date as of the close of trading on Friday.

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