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U.S. healthcare group on track to beat 2019 profit expectations, strategist says
Pfizer assigned an outperform rating to the company by BMO Capital Markets on Sunday, citing “solid” fundamentals as it reissued a second-quarter earnings forecast that was ahead of analysts’ expectations.
The U.S. healthcare company, best known for Viagra and Lipitor, in April forecast second-quarter profit of 39 cents per share on revenue of $13.5bn.
The company had reported a revenue of $13.4bn in the same period last year.
Norman Young, BMO’s head of U.S. equity research, told Reuters on Sunday the estimate was based on a strong Q2 in sales of Xeljanz, an immunology drug; solid sales of solid oral calcium fibrates and Lyrica, a treatment for pain; and growth in market share of market leading respiratory drug Xamax.
“Things seem to be looking up, they are on track to beat their 2019 EBITDA (earnings before interest, taxes, depreciation and amortisation) estimates,” Young said.
In his note to clients, he predicted Pfizer’s revenue and core EBITDA would meet the management’s prior expectation of between $49.5bn and $51.5bn for 2019.
Pfizer is the biggest U.S. drugmaker by sales.
BMO said the shares would trade at 13.6 times core EBITDA estimates for 2019, the median earnings multiple on the S&P 500, based on revenue and core EBITDA estimates.
However, the median on the S&P 500 is 14.6.
Stiff competition for Xeljanz in the rheumatoid arthritis drug market is one of the factors hurting sales this year of the medicine.
Pfizer’s shares were up by 0.64 percent at $39.98 on the New York Stock Exchange (in the last 12 months) compared with the S&P 500’s 12.35% rise.
The company’s shares were up 0.29 percent at $39.98 on the Nasdaq.