Pfizer Inc. (NYSE:PFE)

The analysis of the financial ratios over the five-year period reveals notable fluctuations and general trends in valuation metrics.

Price to Earnings (P/E) Ratio

The P/E ratio exhibited a downward trend from 19.62 in 2020 to a low of 7.58 in 2022, suggesting either increased earnings or a decreasing stock price relative to earnings. However, there was a significant spike to 73.42 in 2023, indicating a sharp increase in stock price relative to earnings or a decrease in earnings. The ratio then moderated to 18.42 in 2024, aligning more closely with the 2020 level, which could signal a normalization following the 2023 anomaly.

Price to Operating Profit (P/OP) Ratio

The P/OP ratio followed a pattern similar to the P/E ratio, decreasing steadily from 21.12 in 2020 to 6.64 in 2022, possibly reflecting improving operating profits or valuation adjustments. The year 2023 saw an extreme surge to 121.63, indicating a possible temporary valuation distortion or operating profit disruption. By 2024, the ratio returned to a more typical value of 11.92, suggesting normalization.

Price to Sales (P/S) Ratio

This ratio demonstrated a more consistent decline from 4.42 in 2020 to 2.35 in 2022, indicating a reduction in stock price relative to sales or growth in sales not matched by price increases. A modest increase occurred in 2023 to 2.61, followed by a slight decline again to 2.32 in 2024. These movements imply relatively stable pricing in relation to sales after the initial decrease.

Price to Book Value (P/BV) Ratio

The P/BV ratio peaked at 3.35 in 2021, down from 2.98 in 2020, but then progressively declined to 2.48 in 2022 and continued to decrease to 1.75 in 2023 and 1.68 in 2024. This steady decline reflects a decreasing market valuation relative to the book value, suggesting market perceptions of reduced asset value or growth prospects.

Overall, the data show substantial volatility in earnings and operating profit-based valuation metrics, particularly with the abrupt spikes in 2023. Conversely, valuation metrics based on sales and book value exhibit more gradual and consistent trends, indicating more stability in those measures. The sharp anomalies in 2023 ratios might warrant further investigation to understand the underlying causes.

The financial data reveals notable fluctuations across the examined periods, particularly in the share price, earnings per share (EPS), and price-to-earnings (P/E) ratio.

Share Price

The share price exhibited an upward trend from 33.82 US$ at the end of 2020 to a peak of 45.96 US$ in 2021. Subsequently, a decline occurred, with the price falling to 42.3 US$ in 2022 and continuing to drop more sharply to 27.55 US$ in 2023 and further to 26.1 US$ in 2024. This downward trend after 2021 suggests a period of negative market sentiment or reduced investor confidence.

Earnings Per Share (EPS)

EPS showed significant growth from 1.72 US$ in 2020, rising substantially to 3.91 US$ in 2021 and further to 5.58 US$ in 2022. However, a sharp decline was observed in 2023 to 0.38 US$, followed by a modest recovery to 1.42 US$ in 2024. The dramatic drop in 2023 likely reflects a period of lowered profitability or extraordinary expenses impacting earnings.

Price-to-Earnings (P/E) Ratio

The P/E ratio decreased steadily from 19.62 in 2020 to 7.58 in 2022, indicating improving earnings relative to the share price during this period. A sudden spike to 73.42 occurred in 2023, which could be attributed to the sharp decline in EPS that year while the share price remained relatively higher. This ratio then normalized somewhat to 18.42 in 2024 as EPS recovered slightly and the share price stabilized at a lower level.

Overall, the data indicates strong earnings growth through 2022, followed by a significant earnings decline in 2023 accompanied by a steep rise in the P/E ratio due to depressed EPS. The share price trajectory mirrors these earnings changes, peaking early and then declining over the last two years, reflecting shifts in profitability and market valuation expectations.

The analysis of the financial ratios and share prices over the five-year period reveals several notable trends.

Share Price

The share price experienced a general upward trend from 33.82 US$ in 2020 to a peak of 45.96 US$ in 2021. However, after this peak, the price declined steadily to 26.1 US$ by the end of 2024, representing a significant drop from the highest value observed.

Operating Profit per Share

Operating profit per share showed a strong increase from 1.6 US$ in 2020 to 6.37 US$ in 2022, indicating improved operational profitability in that period. Subsequently, there was a sharp decline in 2023 to 0.23 US$, followed by a partial recovery to 2.19 US$ in 2024. This volatility suggests fluctuations in operational efficiency or earnings quality.

Price to Operating Profit Ratio (P/OP)

The P/OP ratio decreased significantly from 21.12 in 2020 to 6.64 in 2022, correlating with the increase in operating profit per share and suggesting improved valuation relative to earnings. In 2023, the ratio surged dramatically to 121.63, likely driven by the steep fall in operating profit that year while the share price was still relatively high. By 2024, the ratio decreased again to 11.92, reflecting partial normalization as operating profit improved and share price continued its downward trend.

Overall, the data indicates a period of strong profitability growth through 2022 with corresponding share price appreciation and improved valuation metrics. However, 2023 was marked by significant declines in operating profit per share and a consequent spike in P/OP ratio, pointing to potential challenges. The year 2024 shows signs of recovery in operating profitability but continued pressure on share price, resulting in a more normalized but cautious valuation environment.

The share price demonstrated a notable increase from 33.82 US$ at the end of 2020 to a peak of 45.96 US$ by the end of 2021. However, following this peak, a downward trend emerged, with the price declining to 42.3 US$ in 2022 and further decreasing to 27.55 US$ and 26.1 US$ in 2023 and 2024, respectively. This indicates a significant reduction in market valuation after 2021.

Sales per share showed a strong upward trend between 2020 and 2022, rising from 7.65 US$ to 18.01 US$, suggesting improved sales performance or increased revenue generation on a per-share basis. However, this was followed by a sharp drop to 10.55 US$ in 2023, with a modest recovery to 11.23 US$ in 2024. This pattern reflects volatility in sales performance after the peak year of 2022.

Price-to-Sales (P/S) Ratio

The P/S ratio decreased steadily from 4.42 in 2020 to 2.35 in 2022, reflecting that the market price per share grew at a slower pace than sales per share, or that the stock became relatively less expensive in relation to its sales. Subsequently, the ratio slightly increased to 2.61 in 2023 before declining again to 2.32 in 2024. Overall, this trend signals that the stock price valuation relative to sales has generally contracted over the period, with minor fluctuations.

In summary, despite an initial rise in share price and sales per share until 2022, both indicators experienced declines thereafter with sales showing some recovery in 2024 while share price continued downward. The P/S ratio's declining trend suggests a reduced market valuation per unit of sales, possibly indicating growing market caution or changing investor expectations.

Share Price

The share price experienced a significant increase from 33.82 US$ at the end of 2020 to 45.96 US$ by the end of 2021, indicating strong market confidence during that period. However, in 2022, the price declined modestly to 42.3 US$, followed by a sharper decrease to 27.55 US$ in 2023. By the end of 2024, the share price further decreased slightly to 26.1 US$, showing a downward trend over the last three years.

Book Value Per Share (BVPS)

The book value per share demonstrated an upward trend initially, rising from 11.34 US$ in 2020 to 17.02 US$ in 2022. This suggests an increase in net asset value per share during this period. However, a slight decline followed, with BVPS decreasing to 15.76 US$ in 2023 and then marginally lower to 15.56 US$ in 2024, indicating a stabilization or slight erosion in book value per share in recent years.

Price-to-Book Value Ratio (P/BV)

The P/BV ratio peaked at 3.35 in 2021, reflecting relatively high market valuation compared to the book value. Subsequently, it declined progressively to 2.48 in 2022 and then more sharply to 1.75 in 2023. By the end of 2024, the ratio stood at 1.68, which is close to historical lows within this timeframe. This downward trend implies that the market valuation relative to the company's net asset value has become more conservative.

Overall Analysis

The company’s market valuation as reflected by share price and P/BV ratio showed strong performance through 2021, followed by a notable decline in the subsequent years. Despite an initial increase in book value per share until 2022, a modest decrease was observed thereafter, possibly reflecting operational or balance sheet pressures. The contraction in the P/BV ratio suggests that the market has adjusted its expectations downward relative to the company's intrinsic asset base, possibly due to changes in market conditions, company performance, or investor sentiment.