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What’s Pfizer’s Current Valuation?

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Oct. 19 2018, Updated 10:31 a.m. ET

Pfizer’s valuation

In this part, we’ll compare Pfizer’s (PFE) valuation with its peers including Merck (MRK), Johnson & Johnson (JNJ), Eli Lilly (LLY), and Bristol-Myers Squibb (BMY).

The above chart compares Pfizer’s valuation multiples with its peers.

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Forward PE ratios

Pfizer is trading at a forward PE ratio of ~14.5x on October 18—compared to the industry average of ~15.7x. Johnson & Johnson, Merck, and Eli Lilly are trading at higher forward PE ratios of 16.3x, 15.6x, and 19.9x, respectively, compared to Pfizer.

Forward EV-to-EBITDA multiple

On a capital structure neutral basis, Pfizer trades at a forward EV-to-EBITDA multiple of ~12.6x, which is marginally higher than the industry’s average of ~12.5x as of October 18. Johnson & Johnson, Merck, and Eli Lilly are trading at higher forward EV-to-EBITDA multiples of 12.5x, 12.6x, and 15.4x, respectively, compared to Pfizer.

Forward EV-to-revenues multiple

Pfizer trades at a forward EV-to-revenues multiple of ~5.2x, which is lower than the industry’s average of ~4.8x as of October 18. Johnson & Johnson, Merck, and Eli Lilly are trading at forward EV-to-revenues multiples of 4.7x, 4.8x, and 5.2x, respectively, compared to Pfizer.

Notably, the iShares Core High Dividend ETF (HDV) holds 6.2% of its total investments in Pfizer, 7.2% in Johnson & Johnson, 3.9% in Merck, and 1.7% in Eli Lilly.

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