Pfizer Upgraded At Cowen On 'Compelling' Valuation, Innovation

• Pfizer, Inc. PFE shares are up 10.26 percent year to date, from $31.15 on December 31, 2014.
• Cowen’s Steve Scala has upgraded the rating on the company from Market Perform to Outperform, while raising the price target from $35 to $43.
• Scala believes that the stock is “modestly undervalued” and that the company’s “innovative core” has been improving, which has increased growth visibility, while the yield is higher than the U.S. pharma average.

During Cowen’s 18th Annual Therapeutics Conference, held in early October, Pfizer indicated that it had “some significant new product opportunities,” while its “innovative core” was improving, which is “a key goal of top management.”

Analyst Steve Scala believes that the company would return to EPS growth in 2016 and generate above average EPS growth through 2020.

Pfizer is expected to post annual EPS growth of 5014 percent from 2016, driven by Ibrance sales, the acquisition of Hospira, Inc. HSP, “strength of Eliquis performance and assuming one in four earlier stage pipeline targets contributes $400MM in 2020,” Scala mentioned.

The company’s EPS CAGR for 2015-2020 of 11 percent is one of the best in the pharma segment. In addition, Scala stated that Pfizer’s R&D pipeline is also strong.

Scala also mentioned that the uptake of Ibrance, for breast cancer, has been “brisk, despite accelerated approval for the smaller indication.” The U.S. filing acceptance for a broader indication of the drug is expected by year end 2015.