Pfizer Inc.

: an equity valuation

Abstract

How much will Pfizer worth in December 31st, 2017? The purpose of the present dissertation is precisely give the most accurate answer to this question. Therefore, several steps were carefully followed in order to provide realistic information for Pfizer’s investors. Firstly, the literature was studied about valuation processes and models. Secondly, Pfizer’s business as well as industry’s dynamics were deeply analyzed with the aim of understanding Pfizer’s opportunities and challenges, that not only are arising but also that were faced in the past. Thus, by collecting and analyzing Pfizer’s financial information, it was possible to conclude that Multiples and DCF are clearly the most appropriate valuation methods to use. Nevertheless, forecasts play a key role since and require both quantitative and qualitative basis, thereby it was created a forecasting model that includes qualitative factors that might impact Pfizer’s performance. After reorganizing financial statements and estimating key financial information, it was determined Pfizer’s share price through multiples approach (considering PER and PER 1 year forward) is $39.54 and $34.91, respectively, and through DCF, $36.43. However, due to DCF model’s specifications, Pfizer’s share price will be based on that model. In the final stage, it was done a comparison with Morgan Stanley’s valuation, concluding that the target price is $1.43 lower, since different assumptions were made, such as the inclusion of the forecasting model created. To sum up, regarding the Pfizer’s context and global expectations, I strongly recommend a HOLD decision.

Date of Award	21 May 2018
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	José Carlos Tudela Martins (Supervisor)