U.S. stocks rise on Fed cut bets; earnings continue to flow
Investing.com - BMO Capital has reiterated an Outperform rating and $30.00 price target on Pfizer (NYSE:PFE) following the company’s recent deal announcement. The pharmaceutical giant, currently trading at $24.04, appears undervalued according to InvestingPro’s Fair Value analysis.
The pharmaceutical giant, maintaining a robust 7.15% dividend yield and a GOOD financial health score, has re-entered the obesity and metabolic space through its newly announced acquisition of Metsera, according to BMO Capital’s research note.
BMO Capital views the Metsera deal as "one of Pfizer’s better BD opportunities" after previous setbacks with its lotiglipron and danuglipron programs.
The deal includes contingent value rights (CVRs), which BMO Capital notes allows Pfizer to "de-risk its position while again competing in obesity."
Metsera’s long-acting GLP-1 and amylin agents appear competitive with similar products from industry rivals Lilly and Novo, including eloralintide/cagrilintide and tirzepatide/semaglutide, according to the research firm.
In other recent news, Pfizer has announced a significant move in the obesity treatment sector by entering into an agreement with Metsera. This acquisition is valued at $7.3 billion, with Metsera receiving $4.9 billion upfront and additional contingent value rights, marking a 42% premium over Metsera’s previous closing price. BMO Capital has reiterated its Outperform rating for Pfizer, emphasizing the strategic nature of this re-entry into the obesity metabolic space. Additionally, Bernstein has maintained a Market Perform rating for Pfizer, setting a price target of $30.00 following the acquisition.
Meanwhile, the pharmaceutical industry may face challenges due to new reforms announced by the U.S. Department of Health and Human Services and the Food and Drug Administration. These reforms target misleading direct-to-consumer pharmaceutical advertising, with regulatory actions including warning letters and cease-and-desist notices. In other healthcare news, a panel of vaccine advisers has voted to end the universal recommendation for Covid shots by the Centers for Disease Control and Prevention, making vaccinations a personalized decision. Furthermore, the Trump administration is considering the creation of a website named "TrumpRx" to facilitate discounted prescription medication purchases directly from pharmaceutical companies.
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