Editing Pfizer Inc.
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Our last method for valuing Pfizer was comparable company analysis. Price/earnings and Enterprise Value/EBITDA ratios were used. Earnings of 2022 were multiplied by the median P/E ratio of the competitors (i.e. Merck, GSK, J&J, Abbvie, Amgen, Eli Lilly). The implied market cap was $631,442 million. This divided by shares outstanding resulted in an implied price per share of $112.38 which is significantly higher than the current one of $36.85. Thus the company seems undervalued when using this method. This may mean that investors may not be fully recognizing the company's earnings potential or growth prospects, leading to a lower valuation compared to its peers. | Our last method for valuing Pfizer was comparable company analysis. Price/earnings and Enterprise Value/EBITDA ratios were used. Earnings of 2022 were multiplied by the median P/E ratio of the competitors (i.e. Merck, GSK, J&J, Abbvie, Amgen, Eli Lilly). The implied market cap was $631,442 million. This divided by shares outstanding resulted in an implied price per share of $112.38 which is significantly higher than the current one of $36.85. Thus the company seems undervalued when using this method. This may mean that investors may not be fully recognizing the company's earnings potential or growth prospects, leading to a lower valuation compared to its peers. | ||
When using the second multiple, we multiplied EBITDA of 2022 by the median EV/EBITDA ratio of Pfizer's competitors. The implied enterprise value was $ | When using the second multiple, we multiplied EBITDA of 2022 by the median EV/EBITDA ratio of Pfizer's competitors. The implied enterprise value was $608,533 million. Next, net debt was subtracted and we arrived at a $573,120 million market capitalization. This divided by shares outstanding resulted in an implied price of $102, which is again significantly higher than the current market price. | ||
== Sensitivity Analysis == | == Sensitivity Analysis == |