PFE (Pfizer) How high will it go? Message Board

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Biotech / Medical : PFE (Pfizer) How high will it go?

PFE 25.13

-0.6%

Jan 13 3:59 PM EST

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To: Home-Run who wrote (2031)	5/5/1998 6:45:00 AM
From: Z Analyzer	Read Replies (3) of 9523

Here's a shocker! For those wondering why PFE hasn't gone up further despite great prescription numbers, this could explain it. The Viagra related increase in fizer's share price should be the sum of discounted future cash flows. ASSUMPTIONS 1)Viagra sales of $2 bil in 1998, $4 bil in 1999, $6 bil in 2000 to 2009 expiration. 2) EPS increase of $.25 per share per billion. CONCLUSIONS Viagra will bring in REVENUES of just $63 billion (Pfizer's market cap increased by more than $63 bil in just over a year). Viagra's EPS totals just $15.75 per share over its LIFETIME. Applying a 15% discount rate to the earnings stream, produces a present value of $6.37 per share which is the amount investors should be willing to pay for Viagra's earnings stream in addition to Phizer's base business valuation (look at share price before Viagra runup or assume 30 p/e on $2.00 EPS for $60 base). I personally believe that EPS should increase by more than the $.25 per share per billion but even a max of $.40 doesn't alter the conclusion which is that the stock already reflects the hype and irrational valuations unless you believe my revenue figures are GROSSLY understated.

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