Pfizer Inc.

PFE Details

Pfizer Inc. (NYSE: PFE) is a global pharmaceutical company that develops, manufactures, promotes, distributes, and sells biopharmaceutical drugs. Its principal products include vaccine PREVNAR 13, cancer drug Ibrance, cardiovascular treatment Eliquis, and immunology drug Xeljanz. Over 50% of the company's revenue is generated from outside the US.

Latest News:

• Positive Trial Results: On October 21, 2021, PFE and BioNTech SE released the topline results from their Phase 3 trial, showcasing a relative 95.6% efficacy in individuals over 16 years of age who were given a 30-µg booster dose of the Pfizer-BioNTech COVID-19 Vaccine (BNT162b2), compared to those who did not receive a booster.
• CDC Endorses PFE's PREVNAR 20: On October 20, 2021, the company announced that the Centers for Disease Control and Prevention (CDC) elected to advise PREVNAR 20 for regular use to protect individuals from invasive disease and pneumonia prompted by the 20 Streptococcus pneumoniae (pneumococcus) serotypes.
• Authorization of CIBINQO and XELJANZ: On October 15, 2021, the European Medicines Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP) authorized for marketing the 100 and 200 mg doses of PFE's CIBINQO (abrocitinib) to treat moderate to severe atopic dermatitis (AD) in adults eligible for systemic therapy, and 5 and 10 mg doses of XELJANZ (tofacitinib) for adults with active ankylosing spondylitis (AS). This follows the September 30, 2021 news announcing the approval by the Japanese Ministry of Health, Labour and Welfare (MHLW) for the use of CIBINQO in patients aged 12 years and older.

Q2FY21 Results:

• Improvement in Revenues: PFE's revenues increased by 92.39% to USD 18.98 billion in Q2FY21 (ended July 04, 2021) compared to USD 9.86 billion in Q2FY20, resulting primarily from increased vaccine sales.
• Increase in Net Income: The Q2FY21 net income increased to USD 5.56 billion from USD 3.49 billion in Q2FY20.
• Decent Balance Sheet: As of July 04, 2021, the company had a cash balance of USD 21.70 billion and total debt of USD 39.24 billion.

Key Risks:

• Delays in Receipt of Market Authorization: Expectations from product pipeline, the success of in-line products and product candidates prevailing in the market, delay in the approval of clinical test trials would negatively impact the company's business.
• Stringent Regulatory Scrutiny: Any change in regulatory body, legislative or regulatory action would further dampen the company's business.

Outlook:

• FY21 Revenue & EPS Estimate: PFE expects to clock in USD 78.0 – 80.0 billion in revenues in FY21. Adjusted diluted EPS is expected to range between USD 3.95 and 4.05.
• SI&A and R&D Expenses: For FY21, the estimated range for selling, informational and administrative (SI&A), and research and development (R&D) expenses are USD 11.5 – 12.5 billion and USD 10.0 – 10.5 billion, respectively.

Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

PFE Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

PFE's stock price increased 10.99% in the past six months and is currently close to the mid-point of its 52-week range of USD 32.80 to USD 51.86. The stock is currently trading between its 50 and 200 DMA levels, and its RSI Index is at 49.38. We have valued the stock using the EV/EBITDA multiple-based relative valuation methodology and arrived at a target price of USD 47.69.

Considering the slight uptick in the stock price, decent balance sheet, improvement in the top and bottom line, current valuation, and associated risks, we recommend a "Hold" rating on the stock at the current price of USD 42.93, down 0.53% as of October 25, 2021, 12:06 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV. 

Datto Holding Corp.

MSP Details

Datto Holding Corp. (NYSE: MSP) offers cloud-based software and security solutions for delivery by Managed Service Providers (MSPs). Its primary offerings include Unified Continuity, Networking, and Business Management solutions, which are delivered via an integrated platform serving over one million businesses worldwide.

Latest News:

• Launching SaaS Defense: On October 13, 2021, MSP launched SaaS Defense, its advanced cyber threat protection and spam-filtering solution that enables MSPs to proactively detect and prevent harmful software, phishing, and Business Email Compromise (BEC) attacks that target Microsoft Exchange, OneDrive, SharePoint, and Teams.
• Release of Datto Continuity: On September 14, 2021, the company stated that the Datto Continuity for Microsoft Azure, a Business Continuity and Disaster Recovery (BCDR) solution that protects MSPs and their clients' data in the public cloud from cyberattacks, security breaches, and vendor outages, is now commercially available in the US, Canada, UK, Ireland, Australia, and New Zealand via an Early Access Program until December 2021.

Q2FY21 Results:

• Improvement in Total Revenue: MSP's total revenue increased by 21.80% to USD 151.60 million in Q2FY21 (ended June 30, 2021) compared to USD 124.46 million in Q2FY20, attributable to the addition of 500 MSPs during the quarter.
• Net Income Growth: The Q2FY21 net income increased to USD 16.92 million from USD 8.77 million in Q2FY20.
• Robust Balance Sheet: The company exited the quarter with a cash balance of USD 178.61 million and no debt.

Key Risks:

• Susceptible to Cyberattacks: MSP is exposed to cyber threats, which may lead to a security breach of the company and its clients' confidential data.
• Stiff Competition: It operates in a highly competitive industry, and its market position may be harmed if it fails to cater to end-user needs promptly.

Outlook:

• Q3FY21 Revenue & EBITDA Estimate: MSP expects to generate USD 153 – 155 million in total revenue during Q3FY21, with adjusted EBITDA ranging from USD 32 – 33 million.
• FY21 Outlook: For full-year FY21, the estimated ranges for total revenue and adjusted EBITDA are USD 608 – 612 million and USD 151 – 154 million, respectively.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

MSP Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

MSP's stock price fell 7.16% in the past six months and is currently leaning towards the lower end of its 52-week range of USD 21.98 to USD 33.46. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 52.42. We have valued the stock using the EV/Sales multiple-based relative valuation methodology and arrived at a target price of USD 27.79.

Considering the slight correction in the stock price, robust balance sheet, new product launches, current valuation, and associated risks, we recommend a "Hold" rating on the stock at the current price of USD 23.73, down 1.04% as of October 25, 2021, 1:55 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

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