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On Monday, Morgan Stanley (NYSE:MS) reaffirmed its Equalweight rating and a $31.00 price target for Pfizer Inc. (NYSE:PFE), which currently trades near its 52-week low of $20.91. According to InvestingPro analysis, the stock appears undervalued with a favorable Fair Value assessment. The decision followed Pfizer’s announcement earlier in the day that it would halt the development of its obesity drug candidate, Danu, an oral GLP-1 receptor agonist. Pfizer’s move came after evaluating the collective data, with a particular case of drug-induced liver injury being the predominant factor leading to this decision.
Despite the setback with Danu, Pfizer remains dedicated to addressing obesity and plans to continue exploring opportunities within this therapeutic area. The pharmaceutical giant aims to focus on both internal assets, including oral GIPR and GLP-1 receptor agonists, and external assets. However, Pfizer has indicated it will not pursue undifferentiated injectable treatments.
Pfizer identifies adherence and tolerability of treatments, the demand for oral medications, and the differentiation between fat and muscle loss as key unmet needs in the obesity treatment space. The company’s commitment to these areas remains steadfast despite the discontinuation of Danu.
The research and development expenditure for Danu had been accounted for in Pfizer’s financial guidance for the year 2025. However, Pfizer intends to reallocate the funds previously earmarked for Danu’s development, which means the overall R&D spend guidance for the company remains unchanged. This reallocation strategy is part of Pfizer’s broader approach to manage its investment in research and development efficiently.
In other recent news, Pfizer has been the focus of multiple developments that investors should note. UBS analyst Colin Bristow revised the price target for Pfizer to $24 from $28, maintaining a Neutral rating. This adjustment reflects anticipated impacts from the Inflation Reduction Act on Pfizer’s portfolio, particularly concerning Medicare Part D. UBS also suggested that consensus sales estimates for Pfizer’s products, Paxlovid and Comirnaty, might be overly optimistic. Similarly, Goldman Sachs downgraded Pfizer from Buy to Neutral, lowering the price target to $25, citing uncertainties in Pfizer’s mergers and acquisitions strategy and drug pipeline development.
Additionally, Institutional Shareholder Services advised investors to reject a proposal on executive compensation, expressing concerns over changes in long-term awards for the CEO. In the broader biopharma sector, Bernstein highlighted the tariff risks, with Pfizer identified as having substantial U.S. revenue and imports subject to potential tariffs. These recent developments indicate a cautious outlook on Pfizer’s near-term prospects, with analysts emphasizing the need for strategic clarity and execution.
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