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BoA Adds Pfizer To US 1 List; It 'Won't Keep You Up At Night'

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BoA Adds Pfizer To US 1 List; It 'Won't Keep You Up At Night'
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  • Shares of Pfizer Inc. (NYSE: PFE) have been trending south in recent months, and are currently trading around their 52-week low of $28.25.
  • Bank of America Merrill Lynch’s Colin Bristow maintained a Buy rating for the company, with a price objective of $39.
  • Pfizer’s compelling valuation, low pipeline expectations and strong balance sheet make it an attractive investment option, Bristow stated.

Analyst Colin Bristow added Pfizer to the US 1 List and mentioned that the company is an attractive stand-alone entity, given its compelling valuation, low pipeline expectations and strong balance sheet.

Bristow expects Pfizer’s deal with Allergan plc Ordinary Shares (NYSE: AGN), expected to close in 3Q16, to add $4 per share NPV and be 17 percent accretive in 2019.

“PFE’s current trading range represents a highly attractive entry point, in our view, given we see 37% upside based on our stand-alone value, and ~51% based on the pro-forma valuation,” the analyst wrote.

Pfizer’s shares have lost 25 percent since the speculation of a potential deal on October 28. The lost value is attributable to technical pressure from “merger-arb investors,” a sector rotation out of healthcare and broader market macro pressures.

Bristow pointed out that Pfizer’s shares are now at or near their floor value, and this could being to “drive support from income investors.” He added, “While it’s difficult to pinpoint the time at which the spread will begin to narrow, we believe the current upside potential and yield offset any potential gain of delaying.”

Latest Ratings for PFE

DateFirmActionFromTo
Oct 2017BMO CapitalMaintainsOutperform
Sep 2017Morgan StanleyUpgradesEqual-WeightOverweight
Aug 2017BMO CapitalUpgradesMarket PerformOutperform

View More Analyst Ratings for PFE
View the Latest Analyst Ratings

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