1Q16 analysts’ estimates
Due to Pfizer’s (PFE) strong Innovative Products business and product pipeline, analysts estimate that the company will generate $0.54 in EPS (earnings per share) on sales of $11.9 billion in 1Q16. This translates into a year-over-year rise in revenues of ~9.8% in 1Q16 compared to a ~3.8% fall in 1Q15.
Analysts estimate that Pfizer’s EPS will rise further to $0.59 with revenues of $12.7 billion in 2Q16.
Analysts’ estimates show EPS of ~$2.29 for 2016 and ~$2.51 for 2017. Pfizer’s reported revenues have fallen over the past few years, to 1.1% in 2015 and 4.0% in 2014. However, estimates show a rise of over 4.7% in revenues in 2016 and another ~3.5% in 2017, due to the growth of revenues in oncology and alliances.
Pfizer’s gross margin is expected to fall from 80.7% in 2015 to 78.2% in 2015, but it’s projected to rise to 78.9% in 2017. The expected fall in 2016 is due to an increased cost of sales for new and existing products.
Pfizer’s EBITDA (earnings before interest, tax, depreciation, and amortization) margin is expected to remain flat at ~42% in 2016 over 2015. It’s expected to improve even more to ~43.6% in 2017. The rise in the company’s expected EBITDA margin is due to an operational fall in its research and development expenses as a result of lower clinical spends for Prevnar 13, Trumenba, and certain oncology drugs.
Investors can consider the iShares Global Health Care ETF (IXJ), which holds 4.9% of its assets in Pfizer. Investors may also want to consider the VanEck Vectors Pharmaceutical ETF (PPH), which holds 5.6% of its total assets in Pfizer, 5.1% in Novo Nordisk (NVO), 5.5% in GlaxoSmithKline (GSK), 6.7% in Novartis (NVS), and 4.9% in AbbVie (ABBV).