Enterprise Value to FCFF (EV/FCFF)
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Pfizer Inc. pages available for free this week:
- Balance Sheet: Assets
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Geographic Areas
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Debt
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Free Cash Flow to The Firm (FCFF)
Pfizer Inc., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1, 2 See details »
The financial information reveals a significant fluctuation in free cash flow to the firm (FCFF) over the five-year period. Initially, a substantial decrease is observed, followed by a recovery, and then a stabilization. Net cash provided by operating activities mirrors this trend, though to a lesser degree.
- Overall Trend in FCFF
- FCFF experienced a marked decline from US$31,666 million in 2021 to US$6,669 million in 2023. This represents a considerable contraction in the cash flow available to all investors after covering operating expenses and necessary investments. Subsequently, FCFF demonstrated a recovery, increasing to US$12,528 million in 2024 and stabilizing at US$11,370 million in 2025.
- Operating Cash Flow Relationship
- Net cash provided by operating activities generally follows the trend of FCFF. It decreased from US$32,922 million in 2021 to US$8,700 million in 2023, then increased to US$12,744 million in 2024 and US$11,704 million in 2025. The close correlation suggests that changes in operating cash flow are a primary driver of the fluctuations in FCFF.
- Magnitude of Decline and Recovery
- The decline in both FCFF and operating cash flow between 2021 and 2023 is substantial. While a recovery is evident in 2024 and 2025, the levels do not fully return to those seen in 2021. The 2025 FCFF of US$11,370 million remains significantly below the 2021 figure of US$31,666 million.
- Stabilization in Recent Years
- The values for both FCFF and net cash provided by operating activities in 2024 and 2025 are relatively close, indicating a period of stabilization after the initial decline and subsequent recovery. This suggests that the underlying factors impacting cash flow may have reached a new equilibrium.
In summary, the period is characterized by a significant initial decrease in FCFF, followed by a partial recovery and a period of relative stability. The observed trends in operating cash flow closely align with those in FCFF, indicating a strong relationship between the two metrics.
Interest Paid, Net of Tax
Pfizer Inc., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
2 2025 Calculation
Cash paid during the period for interest, tax = Cash paid during the period for interest × EITR
= × =
3 2025 Calculation
Capitalized interest, tax = Capitalized interest × EITR
= × =
The period between 2021 and 2025 demonstrates fluctuating trends in interest expense, net of tax effects, alongside a significant shift in the effective income tax rate. Cash paid for interest, net of tax, initially decreased before increasing substantially, while capitalized interest, net of tax, exhibited a consistent upward trend with a slight deceleration in the final year.
- Effective Income Tax Rate (EITR)
- The effective income tax rate experienced a notable increase from 7.60% in 2021 to 9.60% in 2022. This was followed by a substantial rise to 21.00% in 2023, which remained constant through 2025. This suggests a change in the company’s tax profile or applicable tax laws beginning in 2023.
- Cash Paid for Interest, Net of Tax
- In 2022, cash paid for interest, net of tax, decreased to US$1,304 million from US$1,356 million in 2021, representing a modest decline. However, a significant increase was observed in 2024, reaching US$2,549 million. This represents the largest single-year increase in the observed period. The amount then decreased to US$2,164 million in 2025, though remaining substantially higher than the 2021 and 2022 levels. The increase in 2024 likely reflects increased borrowing or higher interest rates, while the 2025 decrease could be due to debt repayment or a change in interest rate terms.
- Capitalized Interest, Net of Tax
- Capitalized interest, net of tax, consistently increased from US$100 million in 2021 to US$144 million in 2024. This indicates a growing level of investment in projects where borrowing costs are being added to the asset's value. The rate of increase slowed in 2025, with capitalized interest reaching US$131 million, suggesting a potential moderation in capital expenditure or a shift in financing strategies.
The combination of a higher effective income tax rate and increased cash paid for interest, net of tax, particularly in 2024, suggests a potentially greater impact of financing costs on overall profitability. The consistent increase in capitalized interest indicates ongoing investment activity, but the slight decrease in the growth rate in 2025 warrants further investigation.
Enterprise Value to FCFF Ratio, Current
Pfizer Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| AbbVie Inc. | |
| Amgen Inc. | |
| Bristol-Myers Squibb Co. | |
| Danaher Corp. | |
| Eli Lilly & Co. | |
| Gilead Sciences Inc. | |
| Johnson & Johnson | |
| Merck & Co. Inc. | |
| Regeneron Pharmaceuticals Inc. | |
| Thermo Fisher Scientific Inc. | |
| Vertex Pharmaceuticals Inc. | |
| EV/FCFF, Sector | |
| Pharmaceuticals, Biotechnology & Life Sciences | |
| EV/FCFF, Industry | |
| Health Care | |
Based on: 10-K (reporting date: 2025-12-31).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Pfizer Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| EV/FCFF, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| EV/FCFF, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
3 2025 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
The Enterprise Value to Free Cash Flow to the Firm (EV/FCFF) ratio exhibits considerable fluctuation over the observed period. Initial values indicate a relatively stable, though somewhat elevated, valuation. However, subsequent years demonstrate significant shifts, warranting detailed examination.
- Enterprise Value
- Enterprise Value decreased from US$266,077 million in 2021 to US$215,041 million in 2023, representing a substantial decline. A modest recovery to US$205,596 million is then observed in 2025. This suggests potential shifts in market perception of the firm’s overall value, potentially influenced by factors such as debt levels, cash holdings, and equity valuation.
- Free Cash Flow to the Firm
- Free Cash Flow to the Firm (FCFF) followed a decreasing trend from US$31,666 million in 2021 to a low of US$6,669 million in 2023. A significant increase to US$12,528 million occurred in 2024, followed by a slight decrease to US$11,370 million in 2025. This volatility in FCFF likely impacts investor confidence and valuation assessments.
- EV/FCFF Ratio
- The EV/FCFF ratio began at 8.40 in 2021 and increased to 9.15 in 2022. A dramatic increase to 32.24 occurred in 2023, coinciding with the substantial decline in FCFF. The ratio then decreased to 15.33 in 2024, reflecting the recovery in FCFF, and settled at 18.08 in 2025. The high value in 2023 suggests the firm was significantly overvalued relative to its free cash flow generation at that time, or conversely, that FCFF was unusually depressed. The subsequent decline indicates a correction, but the ratio remains elevated compared to the initial years, suggesting continued premium valuation.
The interplay between Enterprise Value and FCFF is critical. The substantial increase in the EV/FCFF ratio in 2023 is primarily driven by the significant reduction in FCFF, indicating a potential disconnect between market valuation and cash flow generation. While FCFF recovers in subsequent years, the EV/FCFF ratio does not return to its initial levels, suggesting that market expectations or risk assessments have shifted.