Did Pfizer’s Top Line Growth Beat Its Peers?



Pfizer’s revenue growth in 2016

Over the past two years, Pfizer (PFE) hasn’t really offered lucrative returns to shareholders. The stock rose 13% over the two-year period from October 10, 2014, to October 11, 2016.

Pfizer’s 2016 revenue guidance range of $51 billion–$53 billion shows its set growth trajectory. Wall Street analysts’ estimates are in line with the guidance. They expect Pfizer to record $52.9 billion in 2016—8.3% YoY (year-over-year) growth.

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Estimated revenue growth for Pfizer’s peers in 2016

Let’s see if Pfizer’s growth outshines its peers. Merck & Co. (MRK) is expected to garner $39.7 billion in 2016—0.49% YoY growth in revenue. Eli Lilly (LLY) is expected to record 6.2% annual revenue growth. Eli Lilly’s revenue is expected to rise to $21.2 billion in 2016. Analysts expect AstraZeneca (AZN) to witness a fall in its top line by 4.5%. Its revenue is expected to fall to $23.6 billion in 2016.

Pfizer set to grow with recent acquisitions 

Considering the projected revenue growth numbers, Pfizer’s 8.3% estimated revenue growth in 2016 is higher than its peers. With three recent acquisitions—Anacor Pharmaceuticals, Medivation, and AstraZeneca’s anti-infective portfolio—Pfizer is set to grow in the long term. As we discussed in the previous part, Pfizer’s best-selling drugs are poised to fall. Reviving the growth can either result from newly launched drugs or acquired assets. That’s one of the major reasons that urged Pfizer to complete multiple acquisitions. We’ll discuss Pfizer’s recent key acquisitions in the next part.

With top line expansion, Pfizer is also expected to experience a margin improvement. Management’s decision to not split the company into two parts shouldn’t really impact the value creation for shareholders. An increase in Pfizer’s share price could boost the Health Care SPDR ETF (XLV). XLV holds 7.3% of its assets in Pfizer.


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