BMO Capital Maintains Buy Rating on Pfizer (PFE) Stock

On May 20, BMO Capital analyst Evan Seigerman maintained a Buy rating on Pfizer Inc. (NYSE:PFE) and kept the price target the same at $30. The reiteration comes after the company recently announced entering into an exclusive licensing agreement with 3SBio, a leading Chinese biopharmaceutical company.

A medical technician wearing protective gloves and a mask mixing a biopharmaceutical solution.

The agreement entails the development, manufacturing, and commercialization of SSGJ-707, which is a bispecific antibody targeting PD-1 and VEGF. The drug is currently under clinical trials in China for treating non-small cell lung cancer, metastatic colorectal cancer, and gynecological tumors. As per the preliminary data, the candidate has shown promising results and safety data. As per the agreement, Pfizer Inc. (NYSE:PFE) has secured exclusive global rights to manufacture and commercialize SSGJ-707 around the world, excluding China.

Seigerman, in his note, regarded this agreement as a significant move to expand the company’s oncology portfolio and leverage its collaborations to enhance its strategic edge. However, he also acknowledged the high cost of this agreement. Pfizer Inc. (NYSE:PFE) will pay 3SBio $1.25 billion upfront, with total development milestone payments reaching up to $4.8 billion. Additionally, 3SBio will receive tiered double-digit royalties on sales if the drug is approved.

Moreover, Seigerman highlighted that Pfizer Inc. (NYSE:PFE) is currently undervalued in comparison to its United States peers and has gained a strategic advantage through transformative acquisitions. The analyst highlighted the company’s operational efficiency, conservative revenue guidance for 2025, and potential clinical developments in areas such as oncology and obesity being the major reasons for optimism.

While we acknowledge the potential of PFE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than PFE and that has 100x upside potential, check out our report about the cheapest AI stock.

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