Pfizer certainly looks like a victim of its own success.
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Summary
- The market is pricing Pfizer like a perpetual no-growth stock.
- There are many reasons for this pessimism, some real, some head fakes, which we will examine in this article.
- Overall, Pfizer at these price levels very likely represents a positive risk/reward for a short to mid-term trade.
Is Pfizer less attractive than a Treasury note?
Pfizer Inc. (NYSE:PFE) has long been considered as a Treasury substitute, since it paid a slightly but reliably growing dividend, with a stock that went nowhere over the long term. Today, it yields about 100 basis points more than the 10-year Treasury, which means investors are probably factoring in further stock declines.
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