Pfizer’s (PFE) days as a market laggard might be over.
Getty Images In 2013, Pfizer returned 26%, lagging the S&P 500′s 32% total return and the 31% rise in major pharmaceutical companies like Merck (MRK) and Novartis (NVS).
This year, Pfizer is looking like a keeper. It’s gained 2.5% this year–good news on the pipeline front has helped–while Novartis, for instance, has fallen 2.9%.
Now, Jefferies analyst Jeffrey Holford and team say it’s time to buy Pfizer’s shares, upgrading it to Buy from Hold. They write:
Oncology and restructuring are key themes for the Pharma sector. Pfizer has both with palbociclib looking like it could launch before year end, whilst management look to give increased visibility on a new organizational structure from Q1’14…
We think that many commentators are overly obsessed with a potential need for Overall Survival data from [Pfizer's] PALOMA-1 study to gain accelerated approval for palbociclib in breast cancer. We believe that the strength and magnitude of the PFS data from this study will be sufficient for filing and potential approval by year-end 2014, especially when considering that it already has Breakthrough Therapy designation from the FDA…
The strategic options being potentially pursued could result in a number of different future structures and timelines attached to them. We expect that the increased visibility, operational efficiency and improved taxation structure that may come with a reorganization will result in increased shareholder value.
Shares of Pfizer have gained 2.5% to $31.37 at 3:26 p.m., while Merck has risen 2.4% to $53.32 and Novartis has fallen 0.8% to $78.02.
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