Pfizer is an excellent ESG management company, consistently striving in environmental, social, and governance aspects, and actively participating in climate change response, particularly by setting a 100% renewable energy target by 2030 through the RE100 initiative.
It pursues continuous growth through innovative new drug development and an expansive M&A strategy, and investment experts positively anticipate future stock price increases.
However, factors such as patent expirations, government regulations, and intensifying competition can cause stock price volatility, so caution is advised when investing.
[ESG Management Column] Pfizer ESG & RE100 Management Case Study and Stock Value
Choi Bong-hyuk, Columnist, AI, ESG, and DX Convergence Expert, Workplace Disability Awareness Training Expert = Pfizer ESG Management and RE100 Linked Stock Analysis: In-depth Analysis and Outlook (As of July 8, 2024)
Current Stock Price and Market Situation
As of July 8, 2024, Pfizer stock (PFE) is trading at $28.05 on the New York Stock Exchange. This represents a 1.26% increase from the previous day's closing price.
Pfizer's stock price has been volatile recently. After falling from a high of $59.48 in December 2021 to $27.29 on February 1, 2024, it has recently begun to rise again. This is due to a combination of factors, including the decline in demand for COVID-19 vaccines and treatments and the impact of patent expirations, as well as improved prospects due to the launch of new drugs and market expansion.
Pfizer is continuously striving to achieve six key ESG goals: climate change, medicine innovation, medicine accessibility, diversity, medicine safety, and corporate ethics. These efforts have earned Pfizer recognition, resulting in its inclusion in various ESG indices such as the Dow Jones Sustainability Indices.
-Reasons and Examples of Recognition as an ESG Management Excellence Company
Pfizer is one of the leading companies recognized for its ESG management.
Environment Introduction of Sustainable Manufacturing Processes: Efforts to reduce energy consumption and waste generation during production.
Expansion of Eco-friendly Packaging: Increasing the proportion of recyclable packaging used.
Minimizing Environmental Pollution during Drug Production: Preventing environmental pollution through the use of advanced technologies and compliance with environmental regulations.
Social Expanding Access to Medicines: Operating programs to provide affordable medicines to low-income and developing country patients (e.g., "Price to Promise")
Responding to Climate Change: Setting carbon emission reduction targets (reducing carbon emissions by half by 2030) and expanding the use of renewable energy.
Contributing to Local Communities: Actively participating in social contribution activities such as supporting local healthcare services and disaster relief efforts.
Governance Transparent Management: Ensuring transparency in corporate activities by disclosing financial information.
Ethical Management: Establishing training and regulations to strengthen anti-corruption and ethical management.
Ensuring Diversity in Board Composition: Expanding the participation of directors from diverse backgrounds, including women and minorities.
Climate Change: Setting a target to reduce carbon emissions from its own operations by 45% by 2030,
Setting a goal to achieve 100% renewable energy usage.
Medicine Innovation: Investing $8 billion in rare disease treatments and expanding the supply of pediatric vaccines.
Equitable Access to Medicines: Operating programs to supply affordable medicines to developing countries and expanding the sharing of patent pools.
Diversity, Equity, and Inclusion: Increasing the employment rates of women and minorities, and expanding employment and support for people with disabilities.
Quality and Safety of Medicines: Expanding the disclosure of clinical trial data and strengthening the provision of patient safety information.
Corporate Ethics: Strengthening ethical management training and establishing a whistleblowing system.
-Future Stock Price Prediction for 2030
The global biopharmaceutical market is expected to continue growing over the next few years, and Pfizer is expected to be a major beneficiary as a leading company in this market.
Pfizer is planning to launch several blockbuster drugs in the coming years, which experts anticipate will contribute to increased revenue and profits.
Improved Profitability: Pfizer is expected to improve its profitability through ongoing cost-cutting efforts.
Investment professionals are optimistic about Pfizer's future stock price outlook.
Major investment banks' stock price predictions include Goldman Sachs: $37, Morgan Stanley: $35, Citigroup: $32, and Barclays: $38, which they predict are possible.
Positive outlook factors include:
Innovative New Drug Development: Pfizer is expected to maintain its leadership in cancer, immunology, and rare disease treatment areas and achieve revenue growth through continuous new drug development. In particular, innovative new drugs such as the cancer immunotherapy "Blincyto" and the hemophilia treatment "Emicizumab" are expected to be growth drivers.
Expansive M&A Strategy: Pfizer is continuously pursuing a growth strategy through the acquisition of biotechnology companies, and this is expected to contribute to securing new drug development pipelines and adopting new technologies. Recently, it acquired the US biotechnology company "Biogen" to expand investment in Alzheimer's disease treatment development.
Sustainable Growth: Pfizer has shown an average annual growth rate of over 5% over the past 10 years, and it is expected to maintain this growth in the future. In particular, it is considered that the potential for revenue growth in emerging markets is high.
Factors that could be variables depending on the stock market situation include:
Patent Expiry: Potential for revenue decline due to patent expiration of some key drugs.
Government Regulation: Changes in regulations, such as government policies to reduce drug prices.
Increased Competition: Intensified competition with other pharmaceutical companies.
-Transparent Management Case Analysis
Pfizer is making various efforts to ensure transparent management.
Disclosure of Financial Information: Regularly publishes quarterly and annual financial statements and provides investors with detailed financial information.
As a measure to meet RE100 standards, Pfizer has set a goal to replace 100% of the carbon emissions from its operations with renewable energy by 2030. To achieve this, it is promoting investments in solar power plants and energy efficiency improvements.
Pfizer participates in the Science Based Targets initiative (SBTi) to set carbon emission reduction targets based on scientific evidence and continues its efforts to achieve these targets.
Benchmarking Points for Domestic Companies
Pfizer's systematic ESG management strategy and transparent information disclosure are exemplary practices that domestic companies should emulate. In particular, Pfizer's efforts to achieve various ESG goals can help domestic companies develop sustainable growth strategies.
Pfizer's efforts to improve after the accounting fraud scandal and its transparent information disclosure practices serve as a reminder of the importance of corporate ethics and transparent management. Domestic companies should refer to Pfizer's experience and practice responsible management with a sense of accountability to investors and society.
Pfizer has secured a leading position in the global pharmaceutical market through innovative drug development, steady growth, an expansive M&A strategy, systematic ESG management, and a transparent management approach.
In particular, its proactive measures to meet RE100 standards have positioned it as a leader in addressing climate change issues. This is expected to enhance Pfizer's appeal in a market where investor interest in Environmental, Social, and Governance (ESG) management is increasing.
Future Outlook
Pfizer is expected to continue its growth through innovative new drug development, expansive M&A, and sustainable growth strategies. By continuing its efforts in ESG management and meeting RE100 standards, it is expected to further gain investor trust and create sustainable corporate value.
This column is not an investment recommendation. Investment decisions should be made at the investor's own discretion and responsibility. It is recommended to consult with a professional before making investment decisions.
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