Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Pfizer Inc., FCFF calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2020-12-31).
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The financial data reveals significant fluctuations in the cash flow metrics over the five-year period. Both the net cash provided by operating activities and the free cash flow to the firm exhibit a peak in 2021, followed by a sharp decline in the subsequent years.
- Net cash provided by operating activities
- The net cash provided by operating activities showed a substantial increase from 10,586 million USD in 2020 to 32,922 million USD in 2021. However, this value declined slightly to 29,267 million USD in 2022 and then dropped more steeply to 8,700 million USD in 2023. A modest recovery is observed in 2024 with an increase to 12,744 million USD.
- Free cash flow to the firm (FCFF)
- The free cash flow to the firm followed a similar pattern, rising from 9,960 million USD in 2020 to 31,666 million USD in 2021. This was followed by a decrease to 27,447 million USD in 2022, a more pronounced decline in 2023 to 6,669 million USD, and then a recovery to 12,528 million USD in 2024.
Overall, the year 2021 represents a high point for cash flow generation, potentially indicating exceptional operational performance or one-time factors contributing to cash inflows. The subsequent years reveal a downturn in cash flow, reaching a low in 2023, before showing signs of partial recovery in 2024. This pattern suggests volatility and possible challenges affecting operational cash generation in the recent period. The free cash flow to the firm closely parallels the net cash from operations, signaling consistent capital expenditure trends relative to operating cash flows during this timeframe.
Interest Paid, Net of Tax
Pfizer Inc., interest paid, net of tax calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2020-12-31).
2 2024 Calculation
Cash paid during the period for interest, tax = Cash paid during the period for interest × EITR
= 3,227 × 21.00% = 678
3 2024 Calculation
Capitalized interest, tax = Capitalized interest × EITR
= 182 × 21.00% = 38
Over the observed five-year period, the effective income tax rate (EITR) exhibited a gradual upward trend initially, rising from 6.4% in 2020 to 9.6% in 2022. Subsequently, there was a marked increase in the rate, reaching 21% by the end of 2023 and maintaining this level into 2024. This shift indicates a significant change in the company’s tax environment or strategy during the latter years of the period, potentially affecting net profitability.
The cash paid during the period for interest, net of tax, demonstrated a fluctuating but overall increasing trajectory. Starting at $1,536 million in 2020, the cash interest payments decreased slightly over the next two years to $1,304 million in 2022. However, this figure rose substantially thereafter, reaching $1,750 million in 2023 and accelerating further to $2,549 million in 2024. This upward trend in interest payments could reflect increased borrowing, higher interest rates, or changes in debt structure.
Capitalized interest, net of tax, showed a consistently increasing pattern throughout the entire period. Beginning at $90 million in 2020, capitalized interest grew steadily each year, reaching $144 million by 2024. The steady rise in capitalized interest suggests ongoing investment in long-term assets or projects that require capitalization of borrowing costs.
Enterprise Value to FCFF Ratio, Current
Pfizer Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 186,705) |
| Free cash flow to the firm (FCFF) | 12,528) |
| Valuation Ratio | |
| EV/FCFF | 14.90 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| AbbVie Inc. | 21.27 |
| Amgen Inc. | 15.44 |
| Bristol-Myers Squibb Co. | 8.91 |
| Danaher Corp. | 29.11 |
| Eli Lilly & Co. | 162.87 |
| Gilead Sciences Inc. | 14.87 |
| Johnson & Johnson | 20.29 |
| Merck & Co. Inc. | 12.17 |
| Regeneron Pharmaceuticals Inc. | 14.60 |
| Thermo Fisher Scientific Inc. | 23.98 |
| Vertex Pharmaceuticals Inc. | — |
| EV/FCFF, Sector | |
| Pharmaceuticals, Biotechnology & Life Sciences | 22.23 |
| EV/FCFF, Industry | |
| Health Care | 21.95 |
Based on: 10-K (reporting date: 2024-12-31).
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, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 192,086) | 215,041) | 251,039) | 266,077) | 216,485) | |
| Free cash flow to the firm (FCFF)2 | 12,528) | 6,669) | 27,447) | 31,666) | 9,960) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 15.33 | 32.24 | 9.15 | 8.40 | 21.74 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| AbbVie Inc. | 20.05 | 14.89 | 12.15 | 13.18 | 13.95 | |
| Amgen Inc. | 15.35 | 22.22 | 16.01 | 15.82 | 14.51 | |
| Bristol-Myers Squibb Co. | 9.94 | 9.14 | 13.87 | 10.52 | 11.63 | |
| Danaher Corp. | 28.93 | 36.34 | 25.74 | 28.25 | 30.66 | |
| Eli Lilly & Co. | 200.93 | 655.33 | 59.14 | 38.37 | 39.01 | |
| Gilead Sciences Inc. | 14.50 | 13.41 | 13.58 | 8.42 | 13.60 | |
| Johnson & Johnson | 18.16 | 19.30 | 23.80 | 21.25 | 20.75 | |
| Merck & Co. Inc. | 13.24 | 37.84 | 19.09 | 23.27 | 34.12 | |
| Regeneron Pharmaceuticals Inc. | 19.30 | 23.99 | 17.96 | 9.81 | 25.74 | |
| Thermo Fisher Scientific Inc. | 26.13 | 28.85 | 31.61 | 33.14 | 26.14 | |
| Vertex Pharmaceuticals Inc. | — | 29.45 | 16.68 | 22.47 | 16.00 | |
| EV/FCFF, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 23.57 | 27.24 | 17.95 | 16.12 | 19.74 | |
| EV/FCFF, Industry | ||||||
| Health Care | 24.03 | 25.94 | 18.56 | 17.80 | 19.47 | |
Based on: 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), 10-K (reporting date: 2020-12-31).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= 192,086 ÷ 12,528 = 15.33
4 Click competitor name to see calculations.
The annual financial data reveals notable fluctuations in the enterprise value (EV), free cash flow to the firm (FCFF), and the EV/FCFF ratio over the five-year period.
- Enterprise Value (EV)
- The enterprise value increased from $216.5 billion in 2020 to $266.1 billion in 2021, indicating growth in the firm's overall valuation during that period. However, from 2021 onward, there is a downward trend, with EV declining to $251.0 billion in 2022, then more sharply to $215.0 billion in 2023, and further to $192.1 billion by the end of 2024. This suggests a contraction in market valuation or changes in capital structure in the later years.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow exhibits considerable variability. It surged from approximately $10.0 billion in 2020 to a peak of $31.7 billion in 2021. Subsequently, FCFF decreased to $27.4 billion in 2022 but experienced a significant drop to $6.7 billion in 2023, followed by a partial recovery to $12.5 billion in 2024. The volatility might reflect operational challenges, changes in investment activities, or variations in working capital management.
- EV/FCFF Ratio
- The EV/FCFF ratio fell sharply from 21.74 in 2020 to 8.4 in 2021, reflecting the rise in FCFF relative to EV, potentially indicating increased valuation efficiency or improved cash generation. The ratio increased slightly to 9.15 in 2022 before escalating dramatically to 32.24 in 2023, corresponding with the substantial decline in FCFF and EV during that year. In 2024, the ratio decreased to 15.33 but remained elevated compared to 2020–2022 levels. This suggests increased valuation risk or less favorable cash flow relative to enterprise value in recent years.