Why Pfizer Popped This Morning

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Pfizer gained over 2% this morning after Jefferies upgraded the pharmaceutical giant from hold to buy.

So what: Along with the upgrade, analyst Jeffrey Holford boosted his price target to $38 (from $33), representing about 24% worth of upside to yesterday's close. While momentum traders might be turned off by the stock's sluggish action in recent months, Holford thinks Pfizer is too juicy to pass up given its growth and margin enhancement opportunities.

Now what: Jefferies raised its 2014 earnings-per-share outlook for Pfizer from $2.24 to $2.27 and its 2015 view from $2.33 to $2.37. "Oncology and restructuring are key themes for the Pharma sector," noted Holford. "Pfizer has both with [breast cancer drug] palbociclib looking like it could launch before year end, while management look to give increased visibility on a new organizational structure from Q1'14." When you couple those solid prospects with Pfizer's peer-lagging forward P/E of 13, it's tough to disagree with Jefferies' bullish stance. 

More compelling income opportunities
One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks as a group handily outperform their non-dividend paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

The article Why Pfizer Popped This Morning originally appeared on Fool.com.

Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story