Market Overview

Could M&A Boost Pfizer More? Jefferies Thinks So


Jefferies commented on Pfizer Inc. (NYSE: PFE) Thursday and made it the firm’s top global pick in U.S. large-cap pharma.

Analysts led by Jeffrey Holford said that “M&A in 2015 could be a major driver of outperformance.”

Holford felt the pending acquisition of Hospira, Inc. (NYSE: HSP) was in line with the firm’s expectation that Pfizer would look to augment the GEP business, although “it was certainly a positive surprise for the market.”

“We believe that other significant acquisitions are possible, though more likely to be aimed at the GIP side of the business, in our view,” according to Holford.

The analysts felt that if Perrigo Company plc Ordinary Shares (NYSE: PRGO) was to “come into play” that it could be a “potentially attractive asset for Pfizer.”

Shire PLC (ADR) (NASDAQ: SHPG) was cited as “as a good potential target given that OUS cash could be deployed on it and it would likely add accretive growth to the remainder of the business.”

Holford concluded that Pfizer was now the firm’s “most preferred stock within US Large Cap Pharma and globally for 2015,” and the analysts believed “that management is committed and highly motivated towards delivering the pipeline, M&A and restructuring catalysts that drive the upside” the analysts saw versus the stock’s current market valuation.

The analysts added that Pfizer, from a PE multiple perspective, was “one of the cheapest US stocks” while trading at 14.8x 2016 estimated EPS, versus the weighted US Pharma sector multiple of 17.7x.

The firm maintained a Buy rating on the stock with a $45 price target.

Pfizer recently traded at $34.34, down 0.06 percent.

Latest Ratings for PFE

Oct 2019ReinstatesNeutral
Aug 2019UpgradesSellHold
Aug 2019MaintainsEqual-Weight

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Posted-In: Jefferies Jeffrey HolfordAnalyst Color Health Care Analyst Ratings General


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