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Pfizer Inc. (PFE) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Pfizer Inc. (PFE)

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Intrinsic Value (DCF)

Current$25.27
→
Intrinsic$23.80
-6%
$12.19$23.80$46.92
Market implies 10% growth for 5 years
PFE appears fairly valued — current price aligns with our DCF estimate.
At $25, the market prices in 10% annual cash flow growth — a moderate expectation aligned with historical trends (9%).
Range: Bear $12 → Bull $47. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →5%7%9%11%
8%$32$36$40$45
10%$18$21$24$27
12%$11$13$15$17
14%$7$8$10$12

Bull Case

  • Bull case ($47) offers 86% upside at 11% growth, 8% discount
  • Conservative 9% growth assumption is achievable based on track record

Bear Case

  • Bear case ($12) implies 52% downside at 7% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$10.73B
Year 2$11.71B
Year 3$12.77B
Year 4$13.93B
Year 5$15.20B
Terminal$240.85B

📐 Model Inputs

Growth Rate9.1%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$9.84BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is PFE stock undervalued or overvalued?
🟡 FAIRLY VALUED

PFE trades at $25.27, within 10% of our $23.80 intrinsic value estimate. At 9.5% WACC and 9.1% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $13.36 (bear) to $38.39 (bull).

What is PFE's intrinsic value?

Using a 5-year DCF model: Base FCF of $9.84B, projected at 9.1% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $65.95B net debt and dividing by 5.70B shares: Bear $13.36 | Base $23.80 | Bull $38.39. Current price $25.27 implies -6% to base case.

How is PFE's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 9.1% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($201.62B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 20.5x.