DCF Studio

    PFE · NYQ · Healthcare

    Pfizer Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 28.95

    Market price

    USD 30.67

    Implied upside

    -5.6%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedReported capital expenditure averages 4.63% of revenue against depreciation and amortisation of 9.28%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 9.28% of revenue so the forecast is not handed free growth. The accounts do not separate depreciation from amortisation, so the combined charge is used - if a large part of it is amortisation of an acquisition, the reported capex is probably right and this substitution is not. Override it if the reported figure is right.

    Value Per Share

    Perpetuity growth
    USD 28.95-5.6%
    Exit multiple
    USD 23.50-23.4%
    Market price
    USD 30.67

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn7bn14bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 62.2bnUSD 59.9bnUSD 58.1bnUSD 56.8bnUSD 56.0bnUSD 55.7bnUSD 55.8bnUSD 56.3bnUSD 57.2bnUSD 58.7bn-0.7%
    EBITUSD 15.0bnUSD 14.4bnUSD 14.0bnUSD 13.7bnUSD 13.5bnUSD 13.4bnUSD 13.4bnUSD 13.6bnUSD 13.8bnUSD 14.1bn-0.7%
    NOPATUSD 13.6bnUSD 13.0bnUSD 12.7bnUSD 12.4bnUSD 12.2bnUSD 12.1bnUSD 12.1bnUSD 12.3bnUSD 12.5bnUSD 12.8bn-0.7%
    Add depreciation & amortisationUSD 5.8bnUSD 5.6bnUSD 5.4bnUSD 5.3bnUSD 5.2bnUSD 5.2bnUSD 5.2bnUSD 5.2bnUSD 5.3bnUSD 5.4bn-0.7%
    Less capital expenditureUSD -5.8bnUSD -5.9bnUSD -6.1bnUSD -6.3bnUSD -6.6bnUSD -6.9bnUSD -7.3bnUSD -7.7bnUSD -8.2bnUSD -8.7bn+4.7%
    Capex, % of revenue9.3%9.9%10.5%11.2%11.8%12.4%13.0%13.7%14.3%14.9%-
    Less increase in working capitalUSD 89.2mUSD 603.1mUSD 459.7mUSD 328.8mUSD 207.1mUSD 91.2mUSD -21.6mUSD -134.0mUSD -248.7mUSD -368.3m-
    Free cashflow to firmUSD 13.6bnUSD 13.3bnUSD 12.4bnUSD 11.6bnUSD 11.0bnUSD 10.5bnUSD 10.0bnUSD 9.7bnUSD 9.4bnUSD 9.1bn-4.4%
    Discount factor0.96880.90940.85350.80110.75200.70580.66250.62180.58360.5478-
    Present valueUSD 13.2bnUSD 12.1bnUSD 10.6bnUSD 9.3bnUSD 8.3bnUSD 7.4bnUSD 6.6bnUSD 6.0bnUSD 5.5bnUSD 5.0bn-
    Present Value Of The ForecastUSD 84.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.529Reported 0.297, pulled toward 1.0 (Blume)
    Cost of equity7.13%Risk-free + beta x equity risk premium
    Cost of debt5.44%Risk-free + 55bp, the spread for a AA rating at 6.5x interest cover. Book interest / average debt was lower, at 4.2%.
    Market capitalisationUSD 174.8bn73.2% of capital
    Total debtUSD 64.0bn26.8% of capital, book value as a proxy
    Tax rate9.6%Effective, capped at statutory
    WACC6.54%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 28.95

    61% of EV

    Forecast FCFF, final year
    USD 9.1bn
    Capex at depreciation, working capital in reinvestment
    USD 12.8bn
    Less reinvestment at g/ROIC (25.8% of NOPAT)
    USD -3.3bn
    Capitalised
    USD 9.5bn
    ROIC (reported)
    9.7%
    Terminal value, undiscounted
    USD 240.5bn
    Terminal value, discounted
    USD 131.8bn
    Enterprise value
    USD 215.8bn
    Less net debt
    USD 50.4bn
    Equity value
    USD 165.4bn

    Exit at 9.4x EBITDA

    Value per shareUSD 23.50

    55% of EV

    Terminal value, undiscounted
    USD 183.7bn
    Terminal value, discounted
    USD 100.7bn
    Enterprise value
    USD 184.6bn
    Less net debt
    USD 50.4bn
    Equity value
    USD 134.3bn

    Spread between methods: 21%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.54%49.3354.2761.7974.4199.51
    5.54%35.7137.5140.0043.5949.11
    6.54%27.4828.1028.9530.1331.79
    7.54%21.9622.0722.2622.5522.99
    8.54%17.9917.8617.7517.6817.64

    Outlined: this model. Green text: above today's price of 30.67. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year-14.8%-0.6%-0.1%
    EBIT margin37.7%24.1%25.2%
    Discount rate-6.5%6.3%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.