Pfizer: Still Cheap Valuation Meets A Looming Patent Cliff

Pfizer remains a cautious Buy, trading near intrinsic value with an expected 10% annual return, primarily from its high dividend yield. PFE faces significant headwinds: a looming patent cliff, a stretched balance sheet, and questions about the sustainability of its dividend and growth prospects. Management projects high single-digit revenue CAGR post-2028, driven by acquisitions, pipeline progress, and aggressive cost-saving initiatives, though analysts remain skeptical. Dividend safety is questionable, with free cash flow barely covering payouts and limited flexibility for buybacks or large acquisitions due to high debt. In previous articles I certainly didn't see Pfizer Inc. ( PFE ) as the best investment one can make. The company is facing a massive patent cliff. But I was still convinced the stock might be a “Buy”.