A look at Pfizer’s earnings
Pfizer (PFE) is set to release its 2Q16 earnings on August 2, 2016. Analysts expect to see EPS (or earnings-per-share) of $0.62 and revenues of ~$13.0 billion for 2Q16. The company has surpassed Wall Street analysts’ estimates for EPS over the last few quarters.
For an overview of the company, read Investing in Pfizer? What You Need to Know. You can also read pre-earnings and post-earnings reports for other companies in this industry on our Pharmaceuticals Earnings Overview page.
2Q16 revenue estimates
Pfizer’s growth is driven by its innovative pharmaceuticals business, which includes the GIP (Global Innovative Pharmaceuticals) segment and the VOC (Global Vaccines, Oncology, and Consumer Healthcare) segment, while the established pharmaceuticals business is more mature and is losing its market share to competitors. In 1Q16, Pfizer reported top line growth of ~19.7%, which was mainly driven by the increased sales of the GIP and VOC segment but substantially offset by the established products.
Analysts estimate the revenues for 2Q16 will grow by ~9.8% to ~$13.0 billion, as compared to ~$11.9 billion for 2Q15.
Pfizer’s stock has fallen by nearly 5.9% over the last 12 months, and analysts estimate the stock has the potential to return 5.7%. Analysts have given the stock a 12-month target price of $38.98 per share compared to the last price of $36.89 per share on July 29, 2016. Also, 62% of analysts recommend a “buy,” while 38% recommend a “hold,” according to a Bloomberg survey. The changes in analysts’ estimates and recommendations are due to the changing trends in the stock price.
As of August 1, 2016, the company is trading at a forward PE (price-to-earnings) multiple of ~14.4x, while the industry is trading at a forward PE multiple of ~20.0x. The company’s competitors Johnson & Johnson (JNJ), Merck & Co. (MRK), and Eli Lilly and Company (LLY) have forward PE multiples of 18.1x, 15.6x, and 21.4x, respectively.
To diversify risk, you can consider ETFs like the iShares Global Healthcare ETF (IXJ), which invests 5.3% of its assets in Pfizer.