Benchmark indices witnessed substantial losses in 2022. The S&P 500 has lost 16.2%, while the Dow Jones Industrial Average has lost 7.6% year-to-date.
Amid high-interest rates and the broader market sell-off, value investing has gained significant momentum in 2022. The Vanguard Russell 1000 Value ETF (VONV) has gained 12.5% over the past month. Moreover, the MSCI World Value Index hit 10.3% in October 2022, surpassing its growth counterpart by more than 5%. Value has been outperforming growth this year.
In addition, Professor Tano Santos of Columbia Business School said, “of course value is coming up as investors look more closely at the underlying quality of the business operations of the firm. Certainly, this market is more conducive to a successful value investing strategy.”
Pfizer Inc. (PFE)
PFE discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. It offers medicines and vaccines in various therapeutic areas.
On November 3, 2022, PFE’s investigational cancer immunotherapy, elranatamab, received Breakthrough Therapy Designation from the U.S. Food and Drug Administration (FDA) for treating people with relapsed or refractory multiple myeloma.
This approval is the 12th Breakthrough Therapy Designation for PFE in oncology and is a red-letter achievement in cancer research and development.
PFE’s forward EV/Sales of 2.77x is 30.3% lower than the industry average of 3.98x. Its forward Price/Sales of 2.76x is 34.6% lower than the industry average of 4.22x.
PFE’s revenues came in at $22.64 billion for the third quarter that ended October 2, 2022, down 5.8% year-over-year. However, its non-GAAP net income came in at $10.17 billion, up 39.7% year-over-year, while its non-GAAP EPS came in at $1.78, up 40.2% year-over-year. Also, its income from operations came in at $8.64 billion, up 5.8% year-over-year.
For 2022, analysts expect PFE’s revenue to increase 23.3% year-over-year to $100.24 billion, while its EPS is expected to increase 46.2% year-over-year to $6.46 in 2022. It surpassed EPS estimates in all four trailing quarters. Over the past month, the stock has gained 13.3% to close the last trading session at $48.57.
PFE’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to a Strong Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its weighting.
Also, the stock has an A grade for Value and a B for Growth and Quality. Within the Medical – Pharmaceuticals industry, it is ranked #3 out of 162 stocks. Click here for the additional POWR Ratings for Momentum, Stability, and Sentiment for PFE.
Cisco Systems, Inc. (CSCO)
CSCO designs, manufactures, and sells Internet Protocol-based networking and other products related to the communications and information technology industry in the Americas, Europe, the Middle East, Africa, the Asia Pacific, Japan, and China.
On November 1, 2022, CSCO expanded its portfolio of specializations available through the company’s world-class partner program. The six new solution specializations focus on hybrid cloud, hybrid work, secure access service edge (SASE), and full-stack observability, all of which will enhance customer engagement and utility.
CSCO’s forward EV/EBITDA of 8.92x is 29.5% lower than the industry average of 12.64x. Its forward Price/Cash Flow of 11.13x is 38.7% lower than the industry average of 18.14x.
CSCO’s service revenue came in at $3.41 billion for the fourth quarter that ended July 30, 2022, up marginally year-over-year. Revenue from its End-to-End Security segment came in at $984 million, up 20% year-over-year.
Street expects CSCO’s revenue to increase 5% year-over-year to $54.11 billion in 2023. Its EPS is expected to increase 5.1% year-over-year to $3.53 in 2023. It surpassed EPS estimates in all four trailing quarters. Over the past month, the stock has gained 11.7% to close the last trading session at $44.90.
CSCO’s overall B rating equates to a Buy in our proprietary rating system. The stock has an A grade for Quality. Within the Technology – Communication/Networking industry, it is ranked #4 out of 48 stocks. Click here for the additional POWR Ratings for Growth, Value, Momentum, Stability, and Sentiment for CSCO.
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PFE shares rose $0.06 (+0.12%) in premarket trading Wednesday. Year-to-date, PFE has declined -14.99%, versus a -15.37% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...
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