PFE: Setup Is Still Tricky Despite Sig Vedotin News out of the Way

研报英文原文证据摘录

PFE: Setup Is Still Tricky Despite Sig Vedotin News out of the Way

Pfizer Inc. Equity Research

Investment Thesis, Valuation and Risks

Eli Lilly and Company (LLY)

Investment Thesis

We are Overweight rated. Eli Lilly is positioned well among the large biopharma companies, with no major LoEs approaching and durable

growth behind blockbuster products Mounjaro and Zepbound. We think the Foundayo launch beginning 2026 together could be robust.

We also see pricing headwinds for GLP-1s behind us and Medicare coverage could expand Zepbound patient base, leaving us comfortable

with near-term risks despite premium valuation.

Target Price Valuation for LLY

Our 12-month forward price target of $1,280 is based on our DCF analysis, where we use a discount rate of 7.0% that is in line with its

large biopharma peers and takes into account low cost of capital, as well as inherent drug development risks. For LLY, we assume a 2%

terminal growth rate, as the company possesses a strong pipeline beyond our terminal year 2035.

Risks to Our Price Target and Rating for LLY

Downside Risks:

1. Requirement for the confirmation of tau pathology or more stringent ARIA safety warnings in FDA label

2. Risk that Saxenda generics affect value generation from branded obesity products

3. Positive Ph2 data from AMGN, creating risk of a 3rd player in GLP-1 landscape

Pfizer Inc. (PFE)

We rate PFE Equal Weight, as we see near-term earnings risk due to uncertainty around the COVID business, though the long-term

outlook looks attractive given the company's investments in pipeline and M&A. With some of the pipeline value emerging in next year, we

see it could partially fill the upcoming LOEs. We expect PFE could return to growth post 2028 when some key assets such as weight-loss