Where Will Pfizer Go Next?

With shares of Pfizer (NYSE:PFE) trading around $29, is PFE an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Pfizer is a biopharmaceutical company that discovers, develops, manufactures, and sells medicines for people and animals worldwide. The company manages its operations through five segments: Primary Care, Specialty Care and Oncology, Established Products and Emerging Markets, Animal Health and Consumer Healthcare, and Nutrition. Pfizer’s main products are human and animal biologic and small molecule medicines, as well as vaccines, nutritional products, consumer healthcare products, and products for the prevention and treatment of diseases in livestock and companion animals.

Not only did its prescription for courting AstraZeneca Group (NYSE:AZN) fail, but Pfizer reported on Monday morning that its growth prospects have been undermined by competition from generic drugs. The damage is reflected in its first-quarter earnings, which showed a 15 percent decline in profits despite cost cutting efforts by the company. “Despite continuing revenue challenges due to ongoing product losses of exclusivity and co-promotion expirations, I look forward to the remainder of the year given the strength of our mid- and late-stage pipeline, the continued growth opportunities for our recently launched products, as well as opportunities for upcoming product launches,” Chair and CEO of Pfizer Ian Read said.

“Within both our innovative pharmaceutical businesses and our established pharmaceutical segment, I continue to see attractive opportunities to pursue revenue expansion.” The drugmaker’s shares fell fractionally in premarket trading early Monday morning. According to ABC News, the company has seen its revenue shrink, particularly against competition facing its cholesterol drug Lipitor with peak revenue of $13 billion. The company, ironically, reports its profit forecast for 2014 for earnings per share from $2.20 to $2.30 and revenue of $49.2 billion to $52.3 billion. According to The Wall Street Journal, the drugmaker was counting on an experimental breast cancer drug known as palbociclib as well as expanded use of the Prevnar pneumococcal pneumonia vaccine to help replace the billions of dollars lost to Lipitor and other products facing the generic competition out there. The Wall Street Journal states that Pfizer projects to lose billions of dollars this year in sales owing to patent expirations.