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US Equities · Finance research note

PFE — Pfizer

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 31.62%
Profit Margins 11.83%
Return on Equity 8.31%
Return on Assets 5.69%
Free Float 5.69B
Dividend Yield 7.08%
Short Int % Utilisation 2.85%

2.2 Growth

Metric Value
Revenue Growth 5.4%
Free Cash Flow 12.38B
EBITDA 7.77 (Ratio)
Enterprise Value 197.86B
EV/Revenue 3.12
EV/EBITDA 7.77

Revenue growth of 5.4% indicates steady, moderate expansion.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 17.28%
Risk / Std Dev (Ann.)* 23.37%
1-Year Price Return* 14.04%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $26.79
52-Week Range $23.58 – $28.75
Observation Count 251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

DuPont Model Analysis

The DuPont model decomposes return on equity (ROE) into three operating and capital-structure drivers:

ROE = Net Margin × Asset Turnover × Equity Multiplier

The comparison uses the latest two comparable annual periods available for the issuer, with reported statement amounts shown in US$. Revenue and net income are income-statement flows; total assets and shareholders’ equity are year-end balance-sheet figures. This is a simplified year-end-balance DuPont comparison rather than an average-balance ROE calculation.

DuPont component Calculation FY2025 FY2024
Revenue Reported revenue $62.58B $63.63B
Net income Reported net income $7.77B $8.03B
Total assets Year-end reported balance $208.16B $213.40B
Shareholders’ equity Year-end reported balance $86.48B $88.20B
Net margin Net income ÷ revenue 12.42% 12.62%
Asset turnover Revenue ÷ total assets 0.3006x 0.2982x
Equity multiplier Total assets ÷ shareholders’ equity 2.4071x 2.4194x
ROE Net margin × asset turnover × equity multiplier 8.99% 9.11%

Source: Yahoo Finance annual statements. Values are based on the two latest comparable annual periods returned by the source; fiscal period labels use the statement period-end year.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $62.58B
Prior annual revenue $63.63B
EBIT $10.19B
Tax rate 21.00%
NOPAT = EBIT × (1 − tax rate) $8.05B
Forecast start-growth basis -1.65%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $8.05B
Add: depreciation & amortisation $6.59B
Less: capital expenditure -$2.63B
Less/(add): working-capital cash-flow movement -$5.35B
Current unlevered FCFF $6.66B

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 -1.65% $7.92B $6.48B -$2.59B -$5.27B $6.55B $6.38B
2 -0.61% $7.87B $6.44B -$3.54B -$5.23B $5.54B $5.12B
3 0.43% $7.90B $6.47B -$4.53B -$5.26B $4.59B $4.03B
4 1.46% $8.02B $6.57B -$5.58B -$5.33B $3.67B $3.06B
5 2.50% $8.22B $6.73B -$6.73B -$5.47B $2.75B $2.17B

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 0.28
Cost of equity 6.25%
Pre-tax cost of debt 4.19%
WACC 5.39%
WACC validation requires assumption review

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $97.58B
Implied terminal EV / EBITDA 5.69x
Terminal value as % of enterprise value 78.33%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $20.76B
Present value of terminal value $75.05B
Indicated enterprise value $95.81B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $95.81B
Less: gross interest-bearing debt $63.96B
Add: cash and equivalents $13.60B
Add: affiliate investments $0.00
Less: minority interests $299.00M
Indicated common equity value $45.14B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 5,713,000,000.00
Share-count basis reported diluted weighted-average shares
Current market price $27.22
DCF indicative value per share $7.90
Indicative value vs. market price -70.97%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range review required
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% review required

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 3/4 evidenced checks
Lynch-inspired balance-and-growth checks 3/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:45:26.368966 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

2.7 Quantitative Factor Diagnostics

Model basis: Daily issuer USD excess returns are regressed in-sample using ordinary least squares on matching regional Fama–French factors. FF3 estimates market, size, and value loadings; FF5 adds profitability and investment. Coefficients are descriptive historical exposures, not predictions.

Estimation input Value
Regional factor set US
Factor-return currency USD
Issuer-return basis USD adjusted total return
Estimation window 2025-08-19 to 2026-06-30
Aligned daily observations 217
Minimum observation requirement 120
Currency conversion for HK listings not required

Fama–French Three-Factor and Five-Factor Results

Diagnostic FF3 FF5
Annualised alpha -11.48% -1.09%
Adjusted R² 0.06 0.19
Annualised residual volatility 22.99% 21.19%
Factor loading (t-statistic) FF3 FF5
Market excess return (Mkt-RF) 0.36 (2.69) 0.65 (4.50)
Size (SMB) 0.32 (1.72) 0.03 (0.15)
Value (HML) 0.20 (1.26) -0.44 (-2.45)
Profitability (RMW) NM 0.10 (0.64)
Investment (CMA) NM 1.53 (5.79)

Definitions: Mkt-RF is the market return less the risk-free rate; SMB is small minus big; HML is high minus low book-to-market; RMW is robust minus weak profitability; CMA is conservative minus aggressive investment. Factor returns are sourced from the Kenneth R. French Data Library; issuer adjusted-return history is sourced from Yahoo Finance. For Hong Kong listings, adjusted HKD prices are converted into USD with daily USD/HKD closes before return calculation to match the USD regional factor basis. This is an in-sample historical regression; coefficients and t-statistics do not establish causation or predict future returns. This is research and analysis only, not personalized financial advice.

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