Pfizer Inc. (PFE) Stock Valuation — DCF Analysis
Drug Manufacturers - General · NYSE
Current Price
$26.21
Intrinsic Value
$18.14
-44.5% margin of safety
COMPETITIVE MOAT
↑Strong Drug Pipeline
Pfizer possesses a rich pipeline of drugs in development, including promising obesity treatments. This innovation engine is crucial for future revenue generation and market position.
↑Established Brand and Reputation
As a highly respected pharmaceutical company, Pfizer benefits from significant brand recognition and trust. This reputation aids in drug adoption and investor confidence.
↑GLP-1 Obesity Drug Potential
Pfizer's monthly obesity shot, berobenatide, shows favorable tolerability and efficacy in mid-stage trials. Success in this growing market could offset patent cliff pressures.
INVESTMENT RISKS
↓Patent Cliff Pressures
Pfizer's net income is under pressure due to upcoming patent expirations. This 'patent cliff' necessitates successful new drug launches to maintain profitability.
↓Succession Risk
The potential for key personnel departures or leadership transitions poses a risk. Effective succession planning is vital for continued strategic direction and operational stability.
↓Obesity Drug Competition
While promising, Pfizer's obesity drug faces intense competition. The success of its monthly shot will depend on its ability to differentiate and gain market share.
Base case
PFE base case valuation
A base case discounted cash flow model for PFE estimates an intrinsic value of about $18.14 per share, against a current price of $26.21. The model assumes -5.1% annual free cash flow growth, a 10.0% discount rate, and a 16x exit multiple.
Intrinsic Value
$18.14
Margin of safety
-44.5%
Expected annual return
-7.1%
Base case assumptions: -5.1% annual growth, 10.0% discount rate, 16x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the PFE valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Pfizer Inc. respond.
Open DCF Calculator for PFECompany Overview
Pfizer Inc. is a global biopharmaceutical leader engaged in the research, development, production, marketing, and distribution of a wide array of medicinal and vaccine products worldwide. Its comprehensive portfolio addresses diverse therapeutic areas, including cardiovascular health and women's health, featuring key brands such as the Premarin family and Eliquis. The company also offers advanced biologics, small molecule drugs, immunotherapies, and biosimilars for various conditions, exemplified by Ibrance, Xtandi, and Retacrit. Furthermore, Pfizer provides sterile injectables, anti-infective agents, and a significant oral treatment for COVID-19, including Paxlovid. A substantial portion of its offerings comprises vaccines for infectious diseases such as pneumococcal and meningococcal disease, tick-borne encephalitis, and COVID-19, with notable products like Comirnaty and the Prevnar family. The firm also develops biosimilars for chronic autoimmune and inflammatory disorders, including Inflectra and Xeljanz, alongside specialized therapies for rare conditions like amyloidosis, hemophilia, and endocrine disorders, under brands such as Vyndaqel and BeneFIX. Beyond its proprietary products, Pfizer operates a contract manufacturing division. Its extensive customer base includes wholesalers, retailers, hospitals, clinics, government agencies, pharmacies, individual medical practices, and public health organizations. The company actively fosters strategic collaborations with numerous partners, such as Bristol-Myers Squibb Company, BioNTech SE, and Merck KGaA. Established in 1849, Pfizer Inc. is headquartered in New York, New York.
Financial Metrics — PFE Stock Valuation Data
Revenue/Share (TTM)
$11.13
FCF/Share (TTM)
$1.67
ROIC (TTM)
8.0%
ROE (TTM)
8.4%
P/FCF
15.8x
EV/EBITDA
12.7x
FCF Yield
6.35%
Debt/Equity
0.72x
Based on trailing twelve-month data, PFE shows a free cash flow per share of $1.67 and a ROIC of 8.0%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 15.8x and FCF yield of 6.35% are important context metrics when evaluating PFE's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of PFE?
Pfizer Inc. currently generates $1.67 in free cash flow per share. At the current price of $26.21, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is PFE undervalued?
PFE trades at a P/FCF ratio of 15.8x with a free cash flow yield of 6.35%. This P/FCF is in a moderate range. However, whether PFE is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value PFE stock using DCF?
To perform a DCF valuation on Pfizer Inc.: (1) Start with the trailing free cash flow per share ($1.67) as the base, (2) project future FCF growth over 5-10 years based on Drug Manufacturers - General industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting PFE's risk profile — with a debt-to-equity of 0.72x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to PFE?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Pfizer Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Drug Manufacturers - General trends, then discounting those amounts to today's dollars. PFE's ROIC of 8.0% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect PFE stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For PFE, with a debt-to-equity ratio of 0.72x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 12.7x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See PFE PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Healthcare valuationsDCF and P/E value PFE with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.