A look at Pfizer’s earnings
Pfizer (PFE) reported an ~8% rise in its top line in its 3Q16 earnings on November 1, 2016, surpassing Wall Street analysts’ estimates for revenues but missing estimates for EPS (earnings per share). PFE reported EPS of $0.61 for 3Q16, as compared to the estimate of $0.62, and its share price fell ~2.0% to close at $31.07 after its 3Q16 earnings release on November 1, 2016.
Pfizer’s growth is driven by its Innovative Health business, which includes the Global Innovative Pharmaceuticals segment and the Global Vaccines, Oncology, and Consumer Healthcare segment. The Essential Health business is more matured and seems to have secured its market share among competitors.
Pfizer’s top line rose 8% at ~$13 billion for 3Q16, driven by an operational rise of ~10% and the negative currency impact of ~2%, including the impact of legacy Hospira operations. Excluding Hospira, Pfizer reported a 3% operational growth in revenues for 3Q16. At constant exchange rates, both the Innovative Health segment and the Essential Health segment grew by 10% in 3Q16.
US markets contributed 50% of total revenues at ~$6.5 billion for 3Q16, a YoY (year-over-year) rise of ~17%. In international markets, sales were flat at ~$6.5 billion in 3Q16, contributing ~50% of total company revenues.
The Pfizer stock has fallen ~10% in the past 12 months, and the analyst estimate for the stock shows the potential to return ~26.3%. Analysts’ recommendations show 12 months targeted price of $37.75 per share, as compared to the last price of $29.89 per share as on November 3, 2016.
Meanwhile, 50% of analysts recommend a “buy,” while ~50% analysts’ recommend holding Pfizer, according to the Bloomberg consensus. Remember, changes in analysts’ estimates and recommendations are based on changing trends in the stock price.
To diversify risk, investors can consider ETFs like the Fidelity MSCI Healthcare Index ETF (FHLC), which has 6.4% of its total assets in Pfizer, 10.7% in Johnson & Johnson (JNJ), 3.5% in Amgen (AMGN), and 3.3% in Gilead Sciences (GILD).