Pfizer Inc.

PFE Details

Pfizer Inc. (NYSE: PFE) is a global pharmaceutical company engaged in the discovery, development, manufacture, marketing, sales, and distribution of biopharmaceutical products. Its principal products include Pfizer-BioNTech COVID-19 and PREVNAR 13 vaccines, cancer drug Ibrance, cardiovascular treatment Eliquis, and immunology drug Xeljanz. As of November 16, 2021, the company's market capitalization stood at USD 278.68 billion.

Latest News:

• Encouraging Test Results: On November 05, 2021, PFE announced that its investigational novel COVID-19 oral antiviral candidate, PAXLOVIDTM, was found to lower the risk of hospitalization or mortality by 89% compared to placebo in non-hospitalized high-risk adults with COVID-19. In addition, patients who received PAXLOVIDTM had no deaths through Day 28 in the whole study group, compared to 10 deaths in placebo patients. PFE intends to submit the data as soon as possible as part of its continuing rolling submission to the US Food and Drug Administration (FDA) for Emergency Use Authorization (EUA).

• Authorization for Emergency Use in Children: On October 29, 2021, Pfizer and BioNTech SE announced that the FDA approved the Pfizer-BioNTech COVID-19 Vaccine for children aged 5 to 11 years old emergency use. As a result, it is the only COVID-19 vaccine approved for use in this age range in the US.

Q3FY21 Results:

• Improvement in Revenues: PFE's revenues increased by 134.45% to USD 24.09 billion in Q3FY21 (ended October 03, 2021) compared to USD 10.28 billion in Q3FY20 (ended September 27, 2020), attributable to COVID-19 vaccine sales.
• Increase in Net Income: The Q3FY21 net income increased to USD 8.15 billion from USD 1.47 billion in Q3FY20.
• Decent Balance Sheet: As of October 03, 2021, the company had cash & cash equivalents (including short-term investments) of USD 29.70 billion and total debt of USD 39.88 billion.

Key Risks:

• Regulatory Risk: PFE operates in a highly regulated industry. It must comply with strict quality control norms, non-observance of which can lead to recall or even suspension of its products.

Outlook:

• FY21 Revenue & EPS Estimate: PFE expects to clock in USD 81.0 – 82.0 billion in revenues in FY21. Adjusted diluted EPS is expected to range between USD 4.13 and 4.18.
• SI&A and R&D Expenses: For FY21, the estimated range for selling, informational and administrative (SI&A), and research and development (R&D) expenses are USD 11.6 – 12.1 billion and USD 10.4 – 10.9 billion, respectively.

Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation

(Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

PFE Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

PFE's stock price increased 43.01% in the past nine months and is currently leaning towards the higher end of its 52-week range of USD 33.36 to USD 51.86. The stock is currently trading far above its 50 and 200 DMA levels, and its RSI Index is at 68.73. We have valued the stock using the EV/EBITDA multiple-based relative valuation methodology and arrived at a target price of USD 46.62.

Considering the uptick in the stock price and current valuation, we believe the decent business fundamentals are adequately reflected at current trading levels. Hence, we recommend a "Sell" rating on the stock at the closing price of USD 49.60, down 0.10% as of November 16, 2021.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

General Motors Company

GM Details

General Motors Company (NYSE: GM) is engaged in designing, manufacturing, and marketing trucks, crossovers, cars, and automobile parts globally. It also offers automotive financing services via General Motors Financial Company, Inc. (GM Financial). As of November 16, 2021, the company's market capitalization stood at USD 91.42 billion.

Latest News:

• Charging EV through EV Connect: On November 16, 2021, EV Connect, a provider of electric vehicle (EV) charging solutions, announced that it is one of the certified EV Charging solutions providers to assist the deployment of charging at GM's dealerships across the US and Canada. EV Connect will offer its innovative EV charging management solutions, including extensive data analytics and 24/7 customer assistance, as an approved platform to serve GM's EV dealerships.

Q3FY21 Results:

• Decline in Topline: The company reported a decrease of 24.52% in net sales to USD 26.78 billion in Q3FY21 (ended September 30, 2021) from USD 35.48 billion in Q3FY20, attributable to a contraction in Automotive revenue.
• Reduction in Net Income: Net income for Q3FY21 decreased 40.17% YoY and stood at USD 2.42 billion compared to USD 4.05 billion in Q3FY20.
• Cash and Debt Position: As of September 30, 2021, the company had cash & cash equivalents (including short-term investments) of USD 23.94 billion and total debt of USD 108.95 billion.

Key Risks:

• Competition Risk: GM operates in a highly competitive automotive industry that has a surplus production capacity. Therefore, any attempt by a competitor to sell more vehicles could have a significant negative impact on its vehicle prices, market share, and operating performance.

Outlook:

• Net Income & EBIT-Adjusted Estimates: In FY21, GM expects to clock net income in the range of USD 8.1 – 9.6 billion, along with EBIT-adjusted to the tune of USD 11.5 – 13.5 billion.
• EPS Guidance: It also forecasts its FY21 EPS-diluted and EPS-diluted-adjusted to range from USD 5.52 – 6.52 and USD 5.70 – 6.70, respectively.

Valuation Methodology: Price/Earnings Per Share Multiple Based Relative Valuation

(Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

GM Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

GM's stock price has increased 17.12% in the past nine months and is currently leaning towards the higher end of its 52-week range of USD 40.04 to USD 64.30. The stock is currently trading above its 50 and 200 DMA levels, and its RSI Index is at 69.27. We have valued the stock using the Price/Earnings-based relative valuation methodology and arrived at a target price of USD 59.26.

Considering the significant uptick in the stock price in the past nine months, we believe the decent business fundamentals are adequately reflected at the current trading levels. Hence, we recommend a "Sell" rating on the stock at the closing price of USD 62.61, down 0.57% as of November 16, 2021.

* The reference data in this report has been partly sourced from REFINITIV.

*All forecasted figures and industry information have been taken from REFINITIV.

Disclaimer

The advice given by Kalkine Canada Advisory Services Inc. and provided on this website is general information only and it does not take into account your investment objectives, financial situation and the particular needs of any particular person. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. The website www.kalkine.ca is published by Kalkine Canada Advisory Services Inc. The link to our Terms & Conditions has been provided please go through them. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations later.