Pfizer’s (PFE) ex-CEO Ian Read and ex-CFO Frank D’Amelio have retreated from activist investor Starboard Value’s campaign at the pharmaceutical giant. Guggenheim Securities, which acts as an advisor to Pfizer, broke the news first. Both the former executives have shown full support and confidence in Pfizer’s current board and management’s efforts to revive the company. They said they were “fully supportive” of current CEO Albert Bourla.
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Pfizer and Starboard at Loggerheads
Read and D’Amelio are confident that the current team will turnaround the company and help deliver shareholder value. The duo has put out a statement saying that they will not be supporting activist Starboard Value in its fight against Pfizer. The two were reportedly in talks with at least four board members on Sunday, when the news of the activist stake broke. Currently, it is unclear how the decision of the former senior executives will impact Starboard’s fight against Pfizer.
The news comes days after Starboard revealed a nearly $1 billion stake in the ailing pharma company. CEO Bourla is expected to meet Starboard Value’s Jeff Smith in the coming days. The activist firm believes that Pfizer has lost direction and disciplined cost management under the current CEO’s leadership. PFE shares have lost 3.6% in the past year.
Starboard is known to push for board and management changes at companies and bring about an effective turnaround. The activist will try for similar changes at Pfizer to improve its financial performance and declining stock price.
Is Pfizer a Good Investment Now?
Amid a competitive landscape, declining vaccine sales, and poor stock performance, Wall Street remains divided on Pfizer stock. On TipRanks, PFE stock has a Moderate Buy consensus rating based on seven Buys and 13 Hold ratings. Also, the average Pfizer price target of $32.57 implies 7.9% upside potential from current levels. Year-to-date, PFE shares have gained 9.6%.
