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Pfizer stock analysis. Ticker: $PFE

Pfizer stock has plunged over 50% taking the market cap to under 170 billion. Total returns, including dividends, are now only 39% over the last 10 years. That’s one fifth the return of the S&P 500.

Yet, Pfizer is supposed to be a defensive investment. Populations across the world are aging which drives up demand for prescription drugs. Pfizer will bring in 11 billion of net income this year and based on those numbers, the stock looks like good value at under 16 times earnings.

The problem for Pfizer is that more than 50% of revenues are coming from COVID treatments which are falling off a cliff. COVID drug Paxlovid saw almost zero sales in the last quarter. And 27% of Q3 revenue came from drugs that are expiring over the next 5 years.

25 years ago Pfizer launched Viagra, an impotence treatment that became one of the biggest blockbusters of all time. After the patent expired it was bundled up and spun off into a new business that merged with Mylan. Today, Pfizer needs another blockbuster and it’s certainly trying to find one.

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