Pfizer: 3 Key Risks That Warrant A Sell (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• Pfizer's business is facing material revenue shrink issues due to many patent expirations over the next 3 years. Quarterly revenue run rate analysis suggests management may be underestimating the impact.
• PFE continues to have recurring 'unusual charges.' Accounting for this, its EBIT margins are in barely profitable territory.
• The Company is trading at a 32% 1-yr fwd PE discount to peers, but I think this is deserved given its revenue and profitability challenges.
• Relative technicals vs. the S&P 500 look bearish, having recently made a new lower low in the ratio charts.
• Blockbuster drug launches are an upside risk. But I think management's optimism here may be overestimated, as they have grossly overestimated drugs' commercialization potentials before.

Read the full article here.