Pfizer Inc. (PFE): A Bull Case Theory 

We came across a bullish thesis on Pfizer Inc. on Investing With Purpose’s Substack. In this article, we will summarize the bulls’ thesis on PFE. Pfizer Inc.’s share was trading at $24.15 as of September 18th. PFE’s trailing and forward P/E were 12.78 and 7.74 respectively according to Yahoo Finance.

Pfizer (PFE) has experienced a sharp post-COVID revenue normalization, with sales retreating from a 2022 peak of ~$100 billion to $58 billion in 2023, though forecasts project a rebound to ~$64 billion by 2025 driven by new drug launches in oncology and rare diseases. Despite this revenue pullback, the company maintains robust profitability, with operating margins near 28% and net margins exceeding 35%, underpinned by lean expense management. EPS remains solid at ~$2.20, giving a forward P/E under 12x, well below the industry average.

Pfizer generates over $18 billion in annual free cash flow, funding dividends, share buybacks, and R&D without reliance on capital markets, while its balance sheet remains strong with $60 billion in debt against $80 billion in equity and $15 billion in cash equivalents. The stock offers a dividend yield near 6.7%, historically elevated but supported by consistent cash generation, and the company has not cut dividends since the 1940s. If the yield reverts to its 4% historical average, Pfizer shares could imply a price near $42–$45, highlighting significant upside potential.

Technical indicators support a medium-term bullish thesis, with a higher-low/higher-high structure since May, positive RSI and MACD momentum, and retracement support around $25.10–$25.20 presenting a disciplined entry point. Upside targets of $27.50 and $29 align with Fibonacci extensions, while a stop-loss below $24 protects against downside risk. Overall, Pfizer combines defensive qualities, strong free cash flow, a de-rated valuation, and a rich pipeline of new therapies, creating an attractive opportunity for medium- to long-term investors seeking both income and potential capital appreciation.

Previously we covered a bullish thesis on Pfizer Inc. (PFE) by Akim Guerreiro in September 2024, which highlighted its high dividend yield, strong pipeline, strategic M&A with Seagen, and projected recovery in EBITDA and free cash flow. The stock has depreciated approximately by 17% since coverage due to post-COVID revenue normalization. The thesis still stands as Pfizer’s cash flow, pipeline, and valuation remain attractive. Investing With Purpose shares a similar perspective but emphasizes detailed financials and technical entry points.

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Disclosure: None.