Pharmaceutical giant Pfizer (PFE) is facing pressure from activist investor Starboard Value, which recently disclosed a $1 billion stake in the company. According to the Wall Street Journal, the hedge fund aims to revitalize Pfizer’s disappointing performance. Following the news, Pfizer stock gained about 3% in the pre-market trading session.
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It’s important to highlight that Starboard believes that under CEO Albert Bourla, the company has deviated from its disciplined approach to cost management and investment in innovative drugs.
The hedge fund has reportedly reached out to former Pfizer CEO Ian Read and ex-finance chief Frank D’Amelio for assistance in improving the company’s performance. Both executives have shown interest in supporting Pfizer’s turnaround efforts.
Pfizer Stock Falls 50% Amid Sales Decline
PFE stock has plummeted over 50% from its peak in December 2021. While the company achieved significant success during the COVID-19 pandemic, the subsequent decline in COVID-related sales has negatively impacted its overall financial health.
Moreover, the company’s RSV vaccine and obesity pill have underperformed expectations, contributing to investor concerns. Also, PFE’s lack of success in launching a weight-loss drug in comparison to competitors like Eli Lilly (LLY) and Novo Nordisk (NVO), has fueled investor skepticism.
Importantly, the company’s poor strategic acquisitions have raised concerns. One of the most debated deals was Pfizer’s $5 billion purchase of Global Blood Therapeutics. The company withdrew a sickle cell disease drug from the market just two years after acquiring it, raising concerns about its strategic decisions.
Is PFE Stock a Good Buy?
Turning to Wall Street, PFE stock has a Moderate Buy consensus rating based on seven Buys and 11 Holds assigned in the last three months. At $32.75, the average Pfizer price target implies a 14.59% upside potential.
