ICICI Securities upgrades Pfizer Ltd, Westlife Development ratings post q3 results; sees up to 17% upside

ICICI Securities has upgraded ratings of Pfizer ltd and Westlife Development and post strong q3fy22 results of the companies in the quarter ended December 31, 2021. The brokerage sees up to 17 per cent upside from the current levels on these stocks in a period of one year.  

Pfizer Ltd 

ICICI Securities is of the view that recent correction in Pfizer stock price makes valuations attractive. Stating that Pfizer Limited’s (PFL) Q3FY22 result was above its estimates across parameters, it upgraded the rating from hold to buy and revised the target price to Rs 5,314/share. This translates into an upside of 14% on stock price of Rs 4,557 used as base to predict the target price. "We remain positive on the company’s growth visibility with exposure only in domestic formulations and a strong balance sheet with deep cash reserves," it said. 

Key risks: It cut earnings estimates by 2-3% for FY23E-FY24E due to marginal tweak in revenues and operational cost estimates. Key downside risks as per the brokerage is addition of key drugs in NLEM, product concentration, government intervention, and presence of unlisted promoter company. 

The drug firm has reported a profit of Rs 144 crore for the quarter ended December 31, 2021, against a profit of Rs 141 crore posted in the same quarter last year. 

Westlife Development 

Upgrading the stock rating from hold to buy, the brokerage said long-term benefits from expansion of food service market remain intact for the company. It revised the target price to Rs Rs 600, which comes up to 17% on base price of Rs497.   

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After adding 25-30 stores in FY22E, the company plans to accelerate store expansion to around 40 stores in FY23E and add 200+ stores over next 3-5 years. "We believe Westlife’s ramp-up of delivery adoption has been impressive and is certainly seeing higher base-level demand as the situation has started to normalise." 

It also increased FY23E EBITDA estimates by approximately 1%. Downside risks include sustained weak consumer sentiment impacting restaurant throughput and likely higher competitive intensity in the near-term. 

In the quarter ended December 31, 2021, Westlife Development reported a net profit of Rs 20.82 crore as against a net profit of Rs 0.11 crore in Q3 FY21.