Analysts Could Be Undervaluing This Healthcare Giant's Potential

In a report published Friday, Piper Jaffray analyst Richard J. Purkiss maintained an Overweight rating on Pfizer Inc. (NYSE: PFE), with a price target of $48, saying that the Street's 2019 estimate for the company's ex-Hospira appeared too low, at $4B.Analyst Richard Purkiss mentioned that the Street estimate appeared low in view of the "overly conservative" growth for five of the company's key 'PIXEL' brands, namely Prevnar, Ibrance, Xeljanz, Eliquis and Lyrica, as well as "overly aggressive erosion" of the Global Established Products division's mature drug portfolio.Purkiss expects sentiment towards Pfizer's stock to improve "meaningfully" as investors begin to recognize the top-line turnaround from this year. "After enduring five consecutive years of LoE-driven decline at a compound rate of -7%, we now estimate top-line growth for Pfizer through 2019 at a compound rate of +5%."Purkiss commented that the consensus seemed to be "largely extrapolating" the GEP portfolio's recent rate of decline of around 6 percent through 2019. This did not reflect "the substantial geographic mix change" that had occurred and that is expected to continue to do so till 2019. In the report Piper Jaffray noted, "GEP has already shifted from a largely U.S.-dominated business to one that is increasingly dominated by the Emerging Markets which are substantially underpenetrated by volume. We see this regional mix shift alongside the launch of Pfizer's own biosimilars from 2017 onwards as stabilizing GEP's top-line from 2018."