In November, biopharmaceutical firm Pfizer ( PFE) was reportedly evaluating a potential sale or spin-off of its consumer health division but it never came to fruition.
On Wednesday, Morgan Stanley analyst David Risinger argued for the drugmaker to do just that.
Risinger argues that maximizing the value of its consumer health unit would bolster shareholder value, even though the division only accounts for a small percentage of Pfizer's market cap.
"Pfizer's current (price-earnings ratio) of 13x is just over half of some consumer stock P/Es such as Reckitt at 23x, PepsiCo ( PEP) at ~22x, Kraft Heinz Co ( HNZ) ~25x and Hershey ( HSY) ~23x," he noted.
Risinger also argued that the "strategic rationale" for retaining the consumer unit has weakened with the diminishing prospects of transferring proven prescription drugs (Rx) to nonprescription, OTC status.
"We note that the company's pipeline is primarily comprised of drug candidates for complex medical conditions which do not lend themselves to self-diagnosis and self-treatment," he wrote.
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