Buy Pfizer; target of Rs 4800: ICICI Securities

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • Pfizer's revenue growth is expected to be driven by its key brands, Magnex and Eliquis, as well as the newly launched Prevenar 20 vaccine.
  • The company's gross margins are likely to be impacted by an inferior product mix, but lower overhead and employee costs may offset this impact.
  • Pfizer's cash balance of INR 31.7bn may be used for dividend payouts, providing an additional source of return for investors.
  • The company's operating leverage is expected to drive a ~282bps expansion in EBITDA margins over FY26-29E.

Thesis Validation Checklist

To validate the investment thesis, investors should monitor the following signals over the next 12 months:

  • Revenue growth from key brands like Magnex and Eliquis,
  • Gross margin trends and the impact of product mix,
  • EBITDA margin expansion driven by operating leverage,
  • Cash flow generation and potential dividend payouts,
  • Competitive landscape and market share trends in the pharmaceutical industry. If these signals are positive, it would support the BUY rating and target price of INR 4,800.