Pfizer Upgraded To Outperform At BMO Capital Markets On Drug Pipeline Progress

Pfizer Inc. was upgraded to outperform with a $37 price target by BMO Capital Markets early Wednesday. Pfizer shares, which were up 0.6% premarket, closed at $32.76 on Tuesday. BMO Capital Markets analyst Alex Arfaei said Pfizer now "appears to have a number of potential blockbuster growth opportunities, half of which could be approved by 2020, and the company does not expect significant impact from loss of exclusivity from 2020-2025. This would indicate that Pfizer could be poised for several years of somewhat steady ~2-3% revenue growth." The company has an attractive risk/reward profile for patient value investors, Arfaei said. Cancer drug Ibrance looks promising in earlier stage breast cancer and rheumatoid arthritis drug Xeljanz could be competitive in new areas like psoriatic arthritis and ulcerative colitis, Arfaei said, also mentioning anticoagulant Eliquis and a new class of biosimilar drugs. The company's share growth has heretofore been limited since big share moves after the election on the hope of tax reform, Arfaei said, and a large deal could inhibit Pfizer's pipeline progress. Pfizer agreed to buy biotech Medivation last spring for about $14 billion, though some Wall Street critics said it was too high a price. Pfizer shares have risen 0.9% over the year-to-date, compared with a 10.6% rise in the S&P 500 .

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