8 Most Undervalued Pot Stocks to Buy According to Analysts

5. Pfizer Inc. (NYSE:PFE)

Stock Upside Potential: 22.81%

Forward Price to Earnings Ratio (P/E): 8.78

Number of Hedge Fund Holders as of Q3 2024: 80

Pfizer Inc. (NYSE:PFE) is a pharmaceutical company that discovers, develops, and sells biopharmaceutical products. It offers medicines and vaccines in therapeutic areas of cardiovascular metabolic, migraine, and women’s health. The company made a significant entry into the burgeoning medical marijuana sector with a $6.7 billion acquisition of Arena Pharmaceuticals. Pfizer bought Arena Pharmaceuticals to boost its inflammation and immunology treatments. This deal gave Pfizer access to Arena’s experimental drug, Olorinab (APD371), which is designed to help with stomach pain related to gut disorders.

The development of cannabis-based treatments is part of Pfizer Inc. (NYSE:PFE)’s plan to diversify its product pipeline. The company is increasingly looking for ways to regain footing following a rapid decline in Covid business. In addition to cannabis drugs, the company is also betting on cancer drugs. Pfizer Inc. (NYSE:PFE)’s manufacturing optimization program, a major part of its strategy, is anticipated to save about $1.5 billion by the end of 2027. By the end of 2024, the company also hopes to save at least $4 billion in net costs. These cost-cutting initiatives aim to increase profitability and counteract possible revenue losses brought on by patent expirations.

Here’s what Parnassus Investments said about Pfizer Inc. (NYSE:PFE) in its Q1 2024 investor letter:

“During the quarter, we added new positions in Pfizer Inc. (NYSE:PFE), NICE and Charter Communications. We purchased Pfizer to capture the potential upside from any turnaround following the COVID-induced boom-bust cycle of the last few years. Pfizer’s stock price sank by more than 40% in 2023 as COVID-19 vaccine revenues rolled off, providing an attractive entry point for us. The company completed its acquisition of Seagen, which should strengthen Pfizer’s pipeline in antibody-drug conjugates (ADC). Pfizer also offers an attractive dividend yield.”