Trade of the Day: A Defensive Play Even Traders Can Love – PFE Stock

Advertisement

Pfizer Inc. (PFE) — This global pharmaceutical giant offers a broad range of therapeutic products. The company is scheduled to report fourth-quarter and full-year earnings on Tuesday.

S&P Capital IQ, which has a $37 price target on PFE stock, estimates the company will post operating earnings per share (EPS) of $2.25 in 2014, up from $1.65 in 2013.

Pfizer abandoned its pursuit of AstraZeneca plc (ADR) (AZN) last year, which could have lowered its corporate tax rate but likely would have produced limited product synergies. In November, it entered a major cancer drug deal with Germany-based Merck KGaA to develop and commercialize antibodies for immuno-oncology. This could positively impact future earnings.

The company recently raised its quarterly dividend by 8% to $0.28 a share, to be paid on March 3 to shareholders of record Feb. 6. At current prices, PFE stock offers a yield of 3.4%. This, in addition to the company’s plan to increase its $1.3 billion share buyback program by $11 billion, make PFE stock a solid defensive play.

From a technical point of view, PFE stock is attractive for both traders and longer-term investors.

On Wednesday, shares broke to a new multiyear high of $33.50 from a saucer bottom. Coupled with a golden cross, in which the 50-day moving average crossed up and through the 200-day, we have two very strong bullish signals.

Additionally, higher volume on up days and lower volume on down days is a classic bullish pattern. MACD flashed a buy signal as well.

Even though this is considered a defensive stock, it now appears to be a good value for traders. Buy PFE stock for a three-month target of $37, which is 13% above current prices.

PFE Stock Chart
Click to Enlarge

Chart Key


Article printed from InvestorPlace Media, https://investorplace.com/2015/01/pfizer-inc-pfe-stock-trade-day/.

©2024 InvestorPlace Media, LLC